UK risks squandering AI investment without urgent action on data centres
The UK could lose out on billions of pounds in AI investment unless it tackles growing obstacles to data centre development, a new report has warned, as infrastructure experts urge the government to move faster on planning reform and energy policy.
The ‘how to make the UK an AI leader’ report, published by techUK, the Data Centre Alliance, Copper Consultancy and law firm Charles Russell Speechlys, highlights growing concern across the digital infrastructure sector that the UK’s ambitions to lead in AI will falter unless the country builds the data centres needed to support it.
Drawing on a recent industry round table with developers, engineers, planners and legal experts, the report points to a range of issues, including long waits for grid connections, energy price volatility, slow-moving planning regimes and low public awareness, that are threatening to hold back the next wave of AI growth in the UK.
In some cases, developers are waiting up to 15 years for access to the electricity grid.
Energy costs and slow planning risk pushing investment overseas
The government has committed over £2.5bn to computing infrastructure, including two new supercomputers in Bristol and Edinburgh, and launched a network of ‘AI growth zones’ across Greater Manchester, the West Midlands and other key regions.
Prime minister Keir Starmer has pledged to make the UK a world leader in AI, while Chancellor Rachel Reeves recently confirmed a further £2bn to deliver the AI taskforce’s recommendations.
Yet those ambitions are being undermined by persistent infrastructure bottlenecks, particularly around energy access and planning complexity.
According to the report, energy availability and high costs are already pushing potential data centre investment abroad, to more affordable regions like the Nordics and the United States.
Luisa Cardani, head of the Data Centre Programme at techUK, said the UK had the “talent, ambition and capability” to lead in AI, but warned that leadership “is not guaranteed” and will require “bold decisions and a shared national vision”.
The report “hopefully will act as a catalyst for the action needed to ensure the UK’s digital infrastructure remains world leading”, added Steve Hone, chief executive of the Data Centre Alliance.
Sector calls for planning reform and greater public awareness
There is also concern over the government’s reliance on growth zones as a silver bullet.
While welcomed in principle, industry leaders warn that zoning policies could fail to match the real-world demand for digital infrastructure and risk repeating past mistakes, such as the unplanned concentration of data centres in Slough.
The report has urged for the creation of a dedicated planning use class for data centres, giving councils and developers greater clarity and flexibility to respond to where infrastructure is most needed.
Public perception has emerged as another barrier. Surveys suggest that half of the UK public still don’t know what a data centre is, leaving projects vulnerable to opposition or delay due to misinformation.
The report calls for stronger industry-led engagement and for the government to publicly back the role of data centres as essential to economic growth.
Industry leaders say there is still time to act, but the window is narrowing.
Despite strong momentum behind AI investment, including £14bn in recent private-sector commitments and Nvidia’s expanded UK footprint, there is growing concern that inadequate infrastructure could cause Britain to fall behind.
Nvidia chief Jensen Huang, speaking to City PM. at this year’s Viva Tech, praised the UK’s AI talent and ecosystem, but warned that without sovereign infrastructure, the country risks becoming an “AI ecosystem without its own engine.”
The UK’s ‘AI infrastructure roadmap’, expected later this year, is now seen as a critical test of whether the government can turn ambition into delivery – and ensure that the UK not only pioneers AI research, but can host and scale the infrastructure to power it.