If we follow a single unit of electricity through Helsinki’s newest bet on clean heat, it comes off a Finnish grid that runs largely on nuclear, wind, and hydropower. The electrons enter a data center, where they fuel the chips that run artificial intelligence. But cooling fans do not blow the wasted heat into the air; rather, it leaves the building as hot water, traveling through insulated pipes before it warms people’s homes.

That is the arrangement OnZero, a Vienna-based data center developer, and Helen, the City of Helsinki’s energy company, signed on Aug. 31. OnZero will build what it calls an “AI Heat Factory” in Helsinki, expected to deliver up to 525,000 megawatt-hours of heat a year starting in 2027. That will heat about 70,000 apartments.

The deal tests whether the AI boom’s biggest liabilities—its appetite for electricity and the heat its chips throw off—can become assets for a city that wants to stop burning things. It also tests whether going green can pay. Both companies are betting it can: OnZero gets a new revenue stream, and Helen gets heat it says costs less than burning wood or gas.

“The main idea is that one can solve all the criticisms and therefore problems of data centers by looking at a data center not as a consumer of electricity, but as an energy system asset that connects the electricity grid with the heat grid,” Ali Siddiqui, OnZero’s chief executive, told me in an interview. “The problem of water use, the problem of what to do with the heat, the problem of emissions profile, all of these go away.”

Most data centers treat that heat as trash. Servers turn almost all the electricity they draw into heat, and operators use more electricity on fans and chillers to blow it outdoors. Many large sites also run cooling towers that evaporate water: Google’s biggest U.S. data center , in Council Bluffs, Iowa, consumed 1.3 billion gallons of water in 2025, roughly 3.6 million gallons a day, the company reports.

And the power bill keeps climbing. U.S. data centers used 4.4% of the nation’s electricity in 2023. They could use as much as 12% by 2028 , according to Lawrence Berkeley National Laboratory, competing with homes and factories for the same grid. OnZero bets that the heat is worth selling.

A Cold Country’s Heat Problem

Americans may find the setup strange. My home has a gas furnace in the crawl space, as millions of U.S. homes do. “Strangely, in much of the world you generate your own heat at home,” Siddiqui says. Much of Finland, Sweden, and northern Europe instead relies on “district heating”: a utility heats water at central plants and pumps it through underground pipes to homes, offices, and businesses, the same way it delivers electricity or drinking water.

That model gives Helen an unusual problem. Finnish electricity is already nearly carbon-free, but the country is cold. Helen needs as much as 2.5 gigawatts of heat during winter, says Olli Sirkka, its chief executive. The utility shut its last coal plant in 2025 and now leans on heat pumps, electric boilers, and wood. Its goal is to end all combustion, including biomass, by 2040.

The push has a security edge, too: Russia cut off gas exports to Finland in May 2022 after the Finns refused to pay in rubles, and heat generated by domestic electricity is something their neighbor cannot shut off.

“In almost all other countries, the data center heat is cooled to sea or air, so it’s completely wasted,” Sirkka says. Helen has fed data center waste heat into its network since 2010. What’s new is the scale: the OnZero plant would supply roughly 9% of the heat Helen sold in 2024.

Here is how it works. OnZero’s servers are liquid-cooled and do not rely on air. That pulls heat off at about 50 to 60 degrees Celsius, the company says. Industrial heat pumps then raise the water to the 95 degrees Celsius that Helsinki’s network needs. Because the heat is carried away into the city’s pipes, the data center does not need evaporative cooling towers.

The hardware is off the shelf. Other data centers that capture heat typically hand over water at 60 degrees Celsius, Siddiqui says, leaving the utility to buy the heat pumps and the electricity to finish the job. OnZero does that work inside its own fence and sells heat ready for the network. Its claimed edge is efficiency: a control software layer called Whisper, for which OnZero has filed a patent, runs the system.

OnZero owns the building and rents space inside it to big cloud and AI companies. It collects rent from them and sells the heat to Helen. The Helsinki project is sized at 120 megawatts and will cost roughly $1 billion, the company says. OnZero already runs two smaller sites in Finland, each under 5 megawatts.

Skeptics have fair questions. The first is electricity. Data centers are straining power grids from Virginia to Texas. Siddiqui’s answer turns on what Helen would do without him. Having shut its coal plants, the utility must make heat some other way, increasingly with electric boilers and heat pumps that run on grid power.

An OnZero plant uses that electricity first to run AI chips, then hands the resulting heat to Helen, so the same power does two jobs. “We are drawing power from the other bucket,” he says, meaning the electricity that is replacing fossil heat. The argument holds only where someone needs the heat.

The second is the heat pumps themselves, which run on electricity too. OnZero says it captures up to 99% of its servers’ heat, but that doesn’t mean the system runs free. Raising the heat to 95 degrees Celsius takes power. OnZero says its heat pumps deliver about five units of heat for every unit of electricity they use.

The third is summer, when heating demand drops. Helsinki’s network runs year-round for hot water, OnZero says, and any surplus goes to dry coolers, closed-loop radiators that use fans rather than water.

Finally, OnZero says it is still negotiating with several cloud and AI companies for a tenant before the plant gets built. It is also not the region’s only large project: Microsoft is building data centers that the Finnish utility, Fortum, plans to use.

Helen’s own numbers are the strongest answer to the doubters. Since dropping coal, it has cut district heating prices three years running while returning that business to profitability, according to its financial reports. Helen declined to disclose what it will pay for OnZero’s heat, but Sirkka says it costs less than burning wood or gas.

“We have been able to build a kind of a win-win formula: improved profitability, less emissions, and lower prices for our customers,” he says. “We have to be able to make money with it.”

If OnZero’s plant delivers, the AI industry’s waste product becomes a city’s fuel, and the electricity that powers a chatbot gets used twice—an approach that could make data centers easier to accept around the world .