Orange and Morrison announced an exclusivity agreement on Monday to create a jointly controlled data centre company in France, backed by a €3 billion investment programme combining Orange assets, Morrison equity, and debt. The venture targets 400 megawatts of capacity, close to ten times what Orange operates today.
Orange would contribute five French data centres to the vehicle. Morrison would supply the equity funding to scale the platform beyond that starting base.
The sovereignty framing
Both companies pitched the deal as an effort to strengthen Europe’s digital sovereignty, describing it as a “sovereign offering” capable of serving fast-growing cloud and AI demand from Orange and Orange Business customers. The companies also noted that French electricity is among the least emission-intensive in Europe.
There is a wrinkle in that framing. Morrison is a New Zealand-based infrastructure asset manager, founded in 1988, whose portfolio includes Infratil, UK operator Kao Data, CDC Data Centres, and Vodafone New Zealand.
Half the equity in France’s new “sovereign” data centre champion would therefore sit with a fund manager headquartered in Wellington. That is not unusual for European infrastructure deals, but it does complicate the sovereignty language.
How Orange got here
The venture is the resolution of a process that began last year, when Orange sought up to €500 million from the sale of a minority stake in its French data centre operations to fund planned AI investment. Morrison emerged as the favoured bidder over Vauban Infrastructure Partners and Macquarie, according to reporting by L’Informe cited by Telecompaper this month.
What has been announced is considerably larger than a minority stake sale. Orange has ended up with a co-controlled growth platform rather than a cash injection, which suggests the strategic calculation shifted during the process.
What Europe is actually short of
Capacity is the binding constraint on European AI ambitions, and 400MW is a meaningful addition. Research has warned that Europe’s sovereign AI ambition risks stalling on data centre limits, with the EU’s Cloud and AI Development Act aiming to at least triple the bloc’s capacity within five to seven years.
The market Orange is entering is dominated by companies it is nominally positioning against. AWS, Microsoft Azure, and Google Cloud together control around 70% of the European cloud market, a concentration that has increasingly been framed in Brussels as a political exposure rather than a commercial one.
Whether new European capacity translates into genuine independence is contested. Critics have argued that GPU-as-a-service arrangements reinforce the illusion of European AI sovereignty, since the underlying silicon and much of the software stack remain American regardless of where the racks physically sit.
Policy tailwinds and conditions
The EU’s tech sovereignty package has moved to curb US cloud dependence and relaunch its chips strategy, creating a policy environment in which domestically anchored capacity carries a premium. Orange’s timing is not accidental.
The energy angle also matters politically. Brussels has told Big Tech to align AI data centres with climate goals or stay away, making France’s largely nuclear grid a genuine competitive asset for anyone building there.
What has to happen next
This is an exclusivity agreement, not a signed transaction. The companies expect to sign by the end of 2026 and close in the first quarter of 2027, subject to consultation with employee representative bodies and regulatory approvals.
Orange is also pursuing capacity through other routes, having bid alongside Iliad in May for a €10 billion EU AI gigafactory project in France. The data centre venture and the gigafactory bid point at the same conclusion: French telecoms incumbents have decided that owning compute infrastructure is now a core business rather than an adjacency.
The number worth watching is not the €3 billion but the 400MW. Announced capacity targets across Europe have consistently outrun delivered capacity, and grid connections rather than capital have become the real bottleneck.
Get the TNW newsletter #
Get the most important tech news in your inbox each week.