Investment in UK data centres to prepare the infrastructure needed for AI

The increased demand for artificial intelligence has seen an increase in demand for data centres, which provide data storage, processing power and connectivity. In the UK, there has been a recent influx in overseas funding for data centres alongside a government announcement that data centres will now be classed as ‘Critical National Infrastructure’ (CNI). It is hoped that this additional stability and increased investment will provide the UK with the capacity to train the next generation of AI and create a lucrative steam of revenue in the new era of computing.

Overseas investment in UK data centres

In recent weeks, it was announced that four major US based technology companies (CyrusOne, ServiceNow, Cloud HQ and CoreWeave) have committed a collective £6.3 billion investment in data centres in the UK. This investment follows significant commitments from US investment company Blackstone for £10 billion to build a major AI data centre in the North East of England, and Amazon Web Services, which announced plans to invest £8 billion in establishing and enhancing data centres across the UK over the next five years.

This influx of investment will increase computing power and data storage in the UK. The increased storage space will be crucial for the development of the next generation of AI, as AI development involves huge amounts of both computer power and data storage.

The importance of data centres as CNI

While investors are pledging billions to build and maintain UK data centres, the UK government announced in early September that data centres are now considered to be CNI. This classification is significant for investors, both foreign and domestic, as it signals that the UK is a stable environment for AI development and therefore a good place to invest in building and maintaining data centres. CNI status means that data stored in UK data centres will be afforded greater government support both against and when recovering from critical incidents. This will mean that data stored in UK data centres is better protected against cyber security attacks and is less likely to be compromised during power outages and adverse weather.

The bigger picture

Recent increased investment is not only significant in the UK but also globally. From an environmental perspective, training AI is an energy intensive process with vast quantities of data computed. This energy usage happens in the data centres. Data centres are already becoming increasingly power intensive, with a future significant increase in their power usage predicted as the development of AI takes off. This is certainly a consideration for companies investing in data centres for the development of AI with regard to their ESG goals.

However, investment in data centres for the purpose of AI development is predicted to be a huge source of revenue for big tech companies further down the line. Data centre investment in the UK to improve the infrastructure for AI development is only part of a much bigger picture. Big tech companies such as Google and Microsoft are investing tens of billions of dollars globally in data centres, with the hope that these centres will keep them at the forefront of AI development worldwide and will produce a profitable stream of income in the new era of computing. 


For more information, please contact Natalie Northridge and Kate Deniston.