The municipality of Norðurþing has signed a memorandum of understanding with the British-Norwegian company GIGA-42 Ltd. to develop a new data center on the industrial site at Bakki near Húsavík.
The agreement, signed in Húsavík this week by Norðurþing deputy mayor Bergþór Bjarnason and GIGA-42 CEO William Tasney, outlines the first phase of construction: an artificial intelligence–focused data center on a 4.3-hectare plot with an initial power demand of 50 MW. GIGA-42 will need to finalize a power supply agreement with Landsvirkjun, Iceland’s national power company.
Construction is expected to begin in early 2026, with around 100 people involved in the building, design, and planning phases. Once the first stage is completed, the facility is projected to provide between 50 and 80 permanent jobs in fields such as electrical engineering, IT systems, mechanical engineering, cooling technology, operations, and general technical services. The data center is planned to operate 24 hours a day, year-round.
Local leaders say the site at Bakki offers unique advantages, combining renewable geothermal energy from the nearby Þeistareykir power station with efficiency gains from Iceland’s cool climate. The waste heat generated by the facility could also be used for future developments in aquaculture, greenhouses, or other food-related industries.
“The Bakki industrial site is uniquely positioned to combine renewable geothermal power with operational efficiency and energy recycling,” Norðurþing’s council noted, adding that an AI-powered data center has the potential to benefit local residents, the regional economy, and Iceland’s technology sector as a whole.
