On February 24, 2022, when Russian troops invaded Ukraine, the datacentre sector in Russia was booming, enjoying growth rates of 10-12% annually. But as the conflict escalated, Western sanctions kicked in, causing major US tech firms like Apple and Microsoft to leave. This shift crushed any optimism for the sector’s growth.
By early March 2025, Google had severed connections with Russian datacentres, raising alarms about slower access to its services for users in the country. Initially, there was some hope that local providers could fill the gaps left by the departing foreign tech companies, but they struggled to keep pace with the rising demand in Russia’s increasingly digital economy. Oleg Kim from Axoft pointed out that the exit of foreign cloud services led to a real shortage of computing power in Russia, as domestic providers couldn’t expand quickly enough to meet demand.
Key Point, a major datacentre network, estimated that Russia needs to build facilities with 30,000 racks each year for the next five years. Meanwhile, costs have surged. A datacentre rack that used to cost 100,000 rubles now goes for over 150,000. Analysts expect these costs to keep climbing due to logistics challenges and a shrinking skilled labor pool in construction.
This scarcity has hit users hard. Large banks, including Sberbank, are struggling to find appropriate sites for their datacentres. German Gref, Sberbank’s chairperson, stressed the need for a datacentre with at least 200MW capacity, ideally 300-400MW. Stanislav Bliznyuk from T-Bank echoed these concerns, saying that building even two smaller datacentres is proving to be a challenge. They are grappling with finding sites that offer necessary capacity and reasonable rates.
Despite these hurdles, T-Bank plans to open its own data processing network by early 2027. Many large Russian companies are going the same route out of necessity, as compute capacity is in such short supply. Kirill Solyev from Softline Group noted that locating suitable sites for new datacentres in Moscow and St Petersburg is especially tough. For instance, identifying a site for a 60MW datacentre can take up to three years. In fact, there’s only about 50MW of free capacity left in Moscow, equivalent to just two to four large datacentres.
The southern part of the Moscow region alone faces a predicted capacity deficit of 564MW by 2030, potentially reaching 3.15GW by 2042. This shortage is prompting datacentre operators to explore locations outside the major cities and co-locate near renewable energy sources, as the demand for capacity continues to rise, driven in part by the increasing use of AI tools and services.
During the recent Ural Forum on cybersecurity, Alexander Kraynov from Yandex highlighted the difficulties in addressing the energy consumption of AI datacentres. He pointed out that both globally and in Russia, electricity supplies are dwindling. Meeting the energy needs of large datacentres could take up to a year. By April 2024, Russian datacentres were consuming about 2.6GW, which is about 1% of the total available capacity in the country.
To accommodate the demands of AI workloads, operators will need to invest in costly additional equipment, complicating their plans under the current sanctions. Prime Minister Mikhail Mishustin claimed that over half of the necessary server equipment is now being produced domestically, and that number is expected to rise.
On the government side, more financial support is planned for the datacentre industry, as the long payback periods—up to ten years—have made construction challenging. One potential form of aid could involve subsidizing part of the interest rates for loans to datacentre developers.
However, in March 2025, new rules aimed at regulating datacentre construction came into effect, necessitated by the government’s desire to avoid placing servers in residential areas. These regulations introduced further bureaucratic hurdles, potentially extending the construction timeline from five years to seven, and raising questions about whether Russia’s datacentre market can truly thrive.