Spending on new data centres in the UK is projected to reach £10 billion annually by 2029, according to analysis by Barbour ABI, a construction data firm. This represents a significant increase from the £1.75 billion spent in the previous year and the £2.38 billion forecast for 2025. The growth is primarily driven by the increasing demand from artificial intelligence (AI) applications. Barbour ABI’s findings indicate that tech giants are expected to invest £25 billion in the UK over the next five years, with nearly 100 new data centre projects in the pipeline.
Government initiatives, such as AI Growth Zones designed to expedite the planning process for new digital infrastructure, are further supporting this expansion. While London and its surrounding areas have historically dominated the data centre sector, development is progressively extending across the nation. A notable project is the proposed $13 billion “hyperscale” data centre in North East England by U.S. private equity group Blackstone, marking a substantial investment in the region.
Recent agreements, such as the technology pact between Britain and the United States, have seen major U.S. firms including Microsoft, Nvidia, and Google commit to investments in the UK. Since the launch of ChatGPT in late 2022, global demand for data centres and planned projects has skyrocketed. This surge reflects the confidence of both private investors and governments in the transformative potential of generative AI on both work and daily life.