Eni and Khazna's Data Center Venture: Pioneering Italy's AI Infrastructure Future

The rapid evolution of artificial intelligence (AI) and high-performance computing (HPC) has created an urgent demand for advanced digital infrastructure. In this context, Eni—a leading Italian energy giant—and Khazna Data Centers, a UAE-based hyperscale infrastructure specialist, have forged a landmark partnership to build a 500 MW AI data center campus in Ferrera Erbognone, Lombardy, Italy. This venture, part of a broader Italy-UAE strategic collaboration, is not merely an infrastructure project but a strategic bet on Italy's role as a European leader in AI-driven digital transformation.

A Strategic Alliance for Digital and Energy Transition

The joint venture combines Eni's expertise in sustainable energy with Khazna's mastery of hyperscale data center design. The facility will be powered by Eni's “Blue Power,” a low-carbon electricity source generated by a new Combined Cycle Gas Turbine (CCGT) plant equipped with carbon capture and storage (CCS) technology. This integration of decarbonized energy with high-performance computing infrastructure marks a first-of-its-kind synergy in Europe, addressing both the exponential demand for AI workloads and the EU's climate targets.

The partnership is underpinned by the Italy-UAE Strategic Collaboration Framework, announced in February 2025, which aims to install up to 1 GW of IT capacity in Italy. The Ferrera Erbognone campus is the first phase, with plans to expand to 1 GW over time. The project's governance, formalized through Heads of Terms signed in July 2025, ensures alignment between Eni's energy innovation and Khazna's operational excellence.

Sustainability as a Competitive Advantage

The data center's reliance on Blue Power—generated at Eni's Ravenna CCS hub—ensures its operations are among the most environmentally responsible in Europe. By capturing CO₂ emissions from the power plant, the facility reduces its carbon footprint by up to 90%, aligning with the EU's 2030 climate goals. This sustainability edge positions the venture as a model for future data center projects, particularly as regulators increasingly prioritize green energy mandates.

Scalability and Technology for the AI Economy

The 500 MW initial capacity is designed to support high-density AI workloads, including training large language models, autonomous systems, and real-time analytics. The modular design of the campus allows phased expansion, ensuring it can adapt to rapidly evolving technological demands. Khazna's experience in hyperscale infrastructure ensures the facility meets the stringent power density and cooling requirements of next-generation AI systems.

The project also benefits from Italy's strategic location in Europe, offering proximity to major markets while avoiding the network congestion issues plaguing hubs like London and Amsterdam. With Italy's upcoming data center capacity projected to reach 2 GW by 2029—driven largely by Eni-G42 ventures—the Ferrera Erbognone campus is poised to become a cornerstone of Europe's AI ecosystem.

Geopolitical and Economic Implications

Beyond technology, the venture underscores Italy's ambition to become a geopolitical pivot point in the energy and digital spheres. The Italy-UAE partnership, which also includes renewable energy interconnections and critical minerals research, reflects a broader alignment of strategic interests. For Eni, the project diversifies its revenue streams while reinforcing its position as a leader in energy transition. For the UAE, it expands its influence in European digital infrastructure, leveraging its capital and expertise to secure long-term economic partnerships.

Investment Considerations

Investors should view this venture as a dual opportunity:
1. Eni's Energy Transition Play: The stock (ENI.MI) has gained traction as investors bet on its shift toward renewables and sustainable infrastructure. The data center venture reinforces this narrative, potentially driving valuation upside as the company pivots from hydrocarbons to tech-enabled energy solutions.
2. AI Infrastructure Growth: The global data center market is expected to grow at a 12% CAGR through 2030, with AI workloads accounting for a disproportionate share of demand. Investors may consider exposure to data center REITs, cloud infrastructure providers, or even Italy-focused ETFs to capitalize on this trend.

Risks and Challenges

While the project's sustainability and scalability are strengths, execution risks persist. Delays in CCS technology deployment or regulatory hurdles around energy permits could impact timelines. Additionally, competition from established hubs and geopolitical tensions in Europe may limit demand.

Conclusion: A Strategic Bet on the Future

Eni and Khazna's venture is more than a data center—it is a blueprint for how energy and digital infrastructure can converge to power the AI economy. By marrying decarbonized energy with cutting-edge computing, Italy is positioning itself as a leader in Europe's tech and climate agendas. For investors, this project signals a compelling opportunity to align with the twin megatrends of AI-driven growth and sustainability. As the world races to build the infrastructure of tomorrow, Eni and Khazna are building it in Italy—and investors would be wise to take note.

Outlook: Bullish on Eni's strategic pivot, cautious on execution risks. Monitor regulatory approvals and market adoption of AI workloads for further catalysts.