The UK’s AI ambitions are storming ahead to match the pace set by global AI powerhouses like the US, but while AI demand is scaling exponentially, our infrastructure isn’t.
It’s becoming more understood what’s needed from our data centre industry to facilitate the country’s ambitious goals and their role as the physical foundation of digital innovation. But the intricacies of what this means from an operational perspective is still wildly underestimated.
And it all starts with money. To put it plainly, the investment required to make this happen is almost incomprehensible. A recent BBC article reported that around £2.2tn will be spent worldwide on data centres to support AI between now and 2029; half of that total will go on construction costs, and half on hardware. To show the enormity of this investment, that’s roughly what the entire French economy was worth in 2024.
The BBC article goes on to say that roughly 100 data centres will be built over the next few years in the UK alone to meet the demand for AI processing. However, the buzz around AI data centres is quickly balanced out by communities who remain sceptical and find the scale of this development hard to believe. And they have a point.
Throwing investment at data centres is a temporary solution to the UK’s AI goals. Investors need to go in with their eyes wide open to the operational intricacies in order to achieve long-term financial success. Below are the key factors investors need to know about when considering a venture into AI data centre development.
Robust infrastructure
Probably the most widely understood fact about AI is the sheer amount of power it requires to operate – which puts untold pressure on our data centres. The International Energy Agency’s special report ‘Energy and AI’ projects that electricity demand from data centres worldwide is set to more than double by 2030 to around 945 terawatt-hours (TWh). To put that in perspective, that’s slightly more than the current total electricity consumption in Japan.
There are already bottlenecks in the infrastructure required to support AI at scale. Grid capacity is constrained in many high-demand regions, including the South East and London. According to some providers, new connections won’t be accessible for another ten years. As a result, the UK’s potential to boost local computing capacity is restricted.
Cooling is another area with some exciting developments taking place. Facilities equipped with advanced cooling technologies in replacement of legacy evaporative systems, such as liquid immersion or direct-to-chip cooling, are becoming increasingly attractive investment targets.
For the industry moving forwards, water stewardship is absolutely critical, but the scale of the challenge is often misrepresented. The Environment Agency reports that the UK’s top 10 utility providers lose up to 2,700 million litres of water per day through leaking pipes. If we were to apply that volume to the legacy evaporative cooling technologies, which are already in decline and barely used in the UK, it could be enough to cool between 20 GW and 30 GW of IT capacity. By comparison, the total global operational data centre capacity today is estimated at 42.4 GW. In other words, the water lost by utilities in the UK every day could almost cover cooling demand for the entire global data centre IT footprint.
Continued investment and development in this area could therefore play a crucial role in preparing our data centre industry for the continued influx of demand triggered by AI. The other important point is that only those centres with the ability to scale up and down as needed will stand the test of time, meaning sites with modular or phased expansion plans are often better positioned to adapt as the market requires.
Net zero considerations
Perhaps the biggest challenges facing data centres is striking the balance between rapid rollout of AI-ready infrastructure and staying on track with critical green initiatives. Already, many operators are looking into options like modular construction, advanced cooling technologies and the use of renewable energy sources to meet the demand from both sides.
Some forward-thinking providers are already thinking outside the box, looking at how to minimise waste and maximise efforts towards broader ESG goals. For example, at Urmston in Manchester, a 400kW AI data centre is being deployed that will recapture heat energy and recycle it into the community swimming pool. This will save the leisure centre tens of thousands of pounds a year on energy costs and cut hundreds of tonnes of carbon over its lifetime. While small in scale compared to the overall numbers, it demonstrates an important principle: rather than rejecting heat, it can be recovered and re-used to create real value for local communities.
As more of these projects take hold across the country, it makes responsible innovation a far more achievable reality – and investors would do well to keep their ear to the ground for more of these opportunities.
The right expertise
A data centre is only as powerful as the people on the ground. Having a skilled workforce driving operations has always been critical, and while traditional data centre operations and AI-ready ones are mostly the same, there are some technical nuances of AI workloads that demand a new level of expertise.
The industry has long faced a shortage of skilled operators, and this AI boom has only made it worse. Providers are struggling to ramp commissioning agents fast enough, and training cycles that normally take months are being compressed, undermining quality and increasing risk of ill preparation. Staffing and recruitment now require not just finding people but onboarding and training them within these impossible timescales. It’s important that investors consider an operator’s strategy around its workforce to ensure the right expertise is available when needed, but without the risk of over-hiring early on that can backfire down the line.
To invest, or not to invest
Your aim as an investor is a quick return on investment and long-term financial prosperity. Before jumping headfirst into the bustling world of AI data centres, there are a fair few considerations when assessing whether projects are robust enough to stand firm against the barrage of pressure as AI demand increases exponentially.
Data centre industry growth trajectories make it an exciting and attractive investment area but to make the most informed decision and build the most robust, resilient and profitable investment, you should consult and work with specialists in the industry who are able to guide you through every stage of the investment process, ensure optimal outcomes and minimise unnecessary risks.
