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The rise of AI-fuelled data centres set to transform UK regions

September 22, 2024

It’s a warm, sunny day on Slough Trading Estate, where enormous grey warehouses dominate the skyline. But inside one of these unassuming buildings, the future is unfolding.

At Equinix’s LD6 data centre, Mike Oxborrow, senior sales engineer, demonstrates the high-security measures required for entry, including biometric scans. Once through the airlock, known as a “man trap”, visitors are greeted by spotless corridors lined with server-filled cages, their fans working overtime to cool the hardware.

This facility is just one of six Equinix sites in the town, a crucial hub for some of London’s financial institutions. The demand for data centres is surging, driven by the exponential growth of AI and cloud computing. With the UK government recently designating data centres as “national critical infrastructure”, these vast facilities are becoming more essential than ever.

“The boom is already here,” says Harro Beusker, CEO of nLighten, a data centre developer. “Over the last 25 years, IT has grown more important, and now companies are investing more, even beyond economic cycles.”

This month, Amazon announced an £8 billion data centre investment in the UK, promising 14,000 new jobs. Meanwhile, Global Infrastructure Partners and Microsoft have launched a $30 billion global fund to support AI-driven data centre projects. Investors, lured by the high capital requirements and substantial barriers to entry, are eager to capitalise on this rapidly expanding sector.

Data centres are no longer just urban phenomena. Regional hubs are gaining traction, with Newcastle emerging as a hotspot. Firms like Stellium are building data centres there, capitalising on lower land and staffing costs while remaining connected to undersea fibre-optic cables. AI may make these regional centres even more viable, as it is less dependent on the low-latency demands of traditional cloud computing.

Despite the optimism, challenges remain. Data centres are power-hungry operations, with their electricity needs set to increase six-fold over the next decade. As the industry scales up, balancing energy demands with sustainability goals is a critical issue.

The future is not without its uncertainties, but what is clear is that the UK is at the forefront of a data centre revolution. From Slough to Newcastle, these facilities are driving technological change, creating regional job opportunities, and prompting major infrastructure investments across the country.