The UK risks losing its leadership position in artificial intelligence (AI) without a clear national strategy for data centres, a key player in the sector has warned.
Data centres, essential for powering cloud computing and AI applications, have become central to the digital economy. However, without a cohesive plan, the UK could fall behind in the global AI race, according to industry experts.
The UK is currently Europe’s largest data hub, with more than 500 data centres, the majority concentrated in the South East. These facilities are critical to everything from personal device browsing to AI learning, providing the power, connections, and security required for massive data processing.
Despite this status, high land prices, competition for grid connections, and local resistance have created barriers to further expansion in the South East. This has led some companies to explore opportunities beyond the industry’s traditional base, with Kao Data breaking ground on a £350 million development in Stockport, Greater Manchester.
Paul Lamb, Kao Data’s CEO, highlighted the importance of a broader strategy: “If we want to be part of the global AI opportunity, we need to deploy these resources in locations that are suitable, sustainable, and have the opportunity for growth.” He noted that the UK lacked a plan a decade ago when cloud computing took off, resulting in a concentration of power usage around west London. Lamb called for a UK-wide data centre strategy to distribute these facilities across the country.
The challenge of further expansion in the South East is evident in places like Abbotts Langley, Hertfordshire, where a proposed data centre development has sparked a local debate over green belt land. The planning application was initially rejected by the local council, but Housing Minister Angela Rayner called in the decision on her first day in office, indicating the government’s commitment to growth.
However, the push for more data centres has also raised concerns. Local residents and council leaders argue that development on green belt land should only be allowed if there is significant community benefit. Stephen Giles-Medhurst, leader of Three Rivers Council, said, “We will make the best case possible to say no to this development because it is an inappropriate site, which causes very high harm to the green belt.”
Kao Data’s expansion in Greater Manchester reflects a potential solution to the challenges faced in the South East. By repurposing an industrial site and leveraging existing grid connections, the new facility aims to support the growing demand for AI-driven data processing. Andy Burnham, the mayor of Greater Manchester, supports the project, recognising data centres as critical infrastructure for regional economic growth.
The UK government recently designated data centres as “critical national infrastructure,” putting them on a par with power stations and railways. However, industry experts argue that a more comprehensive strategy is needed to ensure the country remains competitive in AI development.
As AI becomes increasingly central to global economic growth, the UK must navigate the challenges of expanding its data centre capacity while balancing environmental concerns and local opposition. Without decisive action, experts warn that the UK could miss out on a key opportunity to lead in the AI revolution.
Jamie Young
Jamie is a seasoned business journalist and Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops to stay at the forefront of emerging trends.
When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.
