Recently, headlines around Deepseek – a disruptive, supposedly more energy-efficient AI model from China – have raised questions about potential reductions in overall data centre demand.
Yet the truth is more nuanced. While any uptick in AI efficiency is good news, such an increase does not negate requirements for robust data centre infrastructure, particularly in the face of ever-expanding compute needs.
At a foundational level, the data centre industry’s growth has always been intrinsically linked to technology adoption. The sector’s trajectory continues upward as AI becomes integral to every enterprise and consumer application. Even if future developments in AI bring a modest efficiency boost, the pace of adoption means the overall demand for computing – and, therefore, data centres – will only rise.
Given the UK’s aspiration to remain a global leader in AI, three strategic imperatives must be addressed: ensuring adequate renewable energy provision, tackling the planning challenges plaguing the industry and developing the new proposed AI Growth Zones (AIGZs), which aim to encourage innovation and regional tech development. All are critical to ensuring data centres can sustainably support the nation’s ambitions while meeting decarbonisation targets.
AI Growth Zones: a catalyst for regional progress
Earlier this year, the government advisor on AI opportunities, Matt Clifford, unveiled the AI Opportunities Action Plan, highlighting the need for infrastructure, skills and regulation to stay ahead in an incredibly competitive global AI race. Central to this strategy is the creation of AI Growth Zones – a series of regions identified for accelerated tech development, inward investment and research breakthroughs.
This approach underscores the urgent need to decentralise compute power across the UK, preventing an over-reliance on well-established technology clusters (such as west London). By driving AI growth in areas like Cambridge, Greater Manchester and other strategic locations, we not only stimulate local economies but also reinforce the resilience of the national data centre network.
AI Growth Zones are a welcome addition to the broader dialogue around data centres being considered critical national infrastructure (CNI).
By placing data centres high on the policy agenda, the government acknowledges that it is no longer enough to rely on organic growth alone. Targeted, region-specific policy frameworks and planning approval can help data centre operators secure land, develop renewable power sources and streamline project timescales.
Just as significantly, we believe local communities can benefit from job-creation, cross-skilling opportunities and a diversified economic base.
Repurposing brownfield sites for sustainable expansion
Despite their essential role in powering AI, data centres traditionally face major land and planning hurdles. The answer to this challenge lies in adopting a forward-thinking approach that capitalises on the UK’s industrial heritage.
Brownfield sites, for example, offer ample opportunity to expand capacity without eroding the greenbelt or generating unnecessary local resistance.
The experience of our £350m campus in Greater Manchester – built on a redeveloped industrial site – demonstrates how such developments can be mutually beneficial.
Once dedicated to heavy industry, older plots can become highly secure, sustainable data centres serving both AI-centric workloads and more conventional enterprise compute. This development path also offers a blueprint for other AI Growth Zones: retrofitting and modernising sites rather than seeking new land parcels.
Crucially, the reuse of existing land reduces environmental impact. By integrating data centre construction with local authority regeneration plans, the benefits can be distributed evenly, fostering a sense of shared ownership in the local community. Moreover, these projects can reinvigorate entire regions at scale, bridging the gap between policy ambition and tangible delivery.
Co-developing data centres and renewable energy
If land availability is one of the first constraints in data centre expansion, then power provision is the second – and often, the more challenging to overcome. Whether supporting the next wave of generative AI models or lifesaving research, high-performance computing (HPC) requires significant energy resources.
To meet the UK’s economic and technology ambitions, data centres and renewable energy facilities must be co-developed in parallel. Data centre demand can commercially underpin onshore and offshore wind farms, solar arrays, hydroelectric sites and in time, even small modular reactors (SMRs).
Operators can secure more predictable power at scale by aggregating energy requirements and using private-wire connections directly between the source and the facility. This localised approach also alleviates strain on the national grid, improving reliability.
In the short term, operators are already forging collaborations with renewable developers to power individual campuses. However, the more transformative approach involves large-scale, region-specific projects that make carbon-free energy a default feature for data centre clusters.
Given the UK’s ambitious net-zero targets, the government is incentivised to encourage such partnerships. These partnerships help data centre operators lock in greener energy while providing developers a stable revenue stream. The UK can promote decarbonisation and technology innovation in tandem by tying AI Growth Zones to concurrent renewable energy projects.
A roadmap for long-term AI success
It is clear that as the UK strives to maintain its status as a global AI powerhouse, a robust, sustainable and future-facing data centre network is non-negotiable. From power constraints to planning approvals, the challenges remain significant – yet they are far from insurmountable.
A streamlined approach to planning, including national-level guidance for local authorities and incentives, such as business rate retention, would expedite development in AI Growth Zones.
At the same time, forging deeper partnerships between data centre operators and renewable energy providers can fundamentally transform the carbon footprint of high-performance computing applications. Together, these measures can unlock AI’s economic potential while ensuring the UK remains at the forefront of sustainable, technology-led progress.
If the UK is to uphold its reputation for world-leading research and innovation, we must combine all these elements: strategic planning, sustainable energy, local empowerment and a willingness to invest where it matters most. Only then can we realise AI’s full promise and ensure that technological breakthroughs can translate into lasting benefits for businesses, society and the environment alike.
Spencer Lamb is the chief commercial officer at Kao Data, a digital infrastructure solution provider.
Recently, headlines around Deepseek – a disruptive, supposedly more energy-efficient AI model from China – have raised questions about potential reductions in overall data centre demand.
Yet the truth is more nuanced. While any uptick in AI efficiency is good news, such an increase does not negate requirements for robust data centre infrastructure, particularly in the face of ever-expanding compute needs.
At a foundational level, the data centre industry's growth has always been intrinsically linked to technology adoption. The sector's trajectory continues upward as AI becomes integral to every enterprise and consumer application. Even if future developments in AI bring a modest efficiency boost, the pace of adoption means the overall demand for computing – and, therefore, data centres – will only rise.
