Orange, Morrison Launch €3bn French Data Center Venture to Scale AI Capacity 10x
The French telecom giant partners with New Zealand infrastructure manager to build sovereign compute infrastructure amid European push to reduce US cloud dependence.
French telecommunications incumbent Orange has entered an exclusivity agreement with New Zealand-based infrastructure manager Morrison to create a jointly controlled data center company in France, backed by a €3 billion investment program.
The venture targets 400MW of total capacity—nearly ten times Orange's current footprint—positioning the company to compete for surging demand in cloud and AI services. Orange will contribute five French data centers to the new entity, with the companies expecting to sign definitive agreements by end of 2026 and close in Q1 2027.
Sovereignty Play
The deal arrives as European governments push for "digital sovereignty" to reduce dependence on US-based cloud giants. AWS, Microsoft, and Google collectively control roughly 70% of the European cloud market, according to industry estimates.
"France will need sovereign, trusted digital infrastructure if it is to rise to the challenge of surging demand driven by cloud and artificial intelligence," Christel Heydemann, Orange Group CEO, said in a statement reported by The Stack.
France's low-emission nuclear energy grid offers a competitive advantage for energy-intensive AI workloads. Industry observers note the EU's Cloud and AI Development Act aims to triple the bloc's data center capacity within five to seven years.
Competitive Selection
Morrison emerged as the favored bidder over competing infrastructure funds Vauban Infrastructure Partners and Macquarie, The Next Web reported. The joint venture will combine Orange assets with Morrison equity and debt financing to fund the expansion.
The partnership represents a strategic shift for Orange, moving compute infrastructure from an adjacency to a core business line. However, the involvement of a New Zealand-based fund manager adds complexity to the "sovereignty" narrative—the capital and control structure spans multiple jurisdictions despite the French operational focus.
Market Context
The announcement aligns with broader European efforts to build indigenous cloud capacity. Multiple telecom incumbents across the continent are reassessing their data center strategies as AI workloads drive unprecedented power demand.
Orange's 10x capacity target signals serious ambition in a market where hyperscalers have historically dominated. Whether a telecom-operator model can compete on cost and scale remains an open question, but the €3 billion commitment suggests Orange views sovereign infrastructure as both a strategic necessity and a commercial opportunity.
The deal awaits regulatory review and final financing arrangements before closing in early 2027.