UK data centre sector under pressure to keep up with AI-driven demand
“The UK data centre market sits at a critical point. Demand continues to accelerate, driven by cloud expansion and the rapid emergence of AI workloads. However, despite these pressures, funding remains available and global investor sentiment is broadly positive.” Says Eddie Tribe, Managing Director of SES Technology.
Leaders from across the UK data centre sector met for a roundtable hosted by SES Technology and chaired by Andy Davis of DataX Connect to discuss a timely industry question: “Can the industry deliver the capacity AI now demands?”, taking into consideration power constraints, planning delays and skills shortages are putting the UK’s data centre sector at risk.
The roundtable, hosted by SES Technology’s Managing Director, Eddie Tribe, brought together expert representatives from various specialisms in the market including from operators, architects, engineers and PMQ’s. Companies represented were Ridge and Partners LLP, AVK, Hoare Lea, studioNWA, CUDO Compute and CyrusOne to discuss what is slowing delivery across the sector.
The discussion focused on whether the UK can keep pace with demand driven by cloud growth and AI workloads. The overall view was that demand is still very strong, but the industry is finding it harder to bring ambitions to fruition. Despite continued investor appetite and strong demand for hyperscale data centres – fuelled by the need for highly scalable infrastructure to support cloud computing and AI – participants expressed growing concern about how quickly projects can actually be delivered, and if they were ‘real’ in terms of securing planning approval, obtaining sufficient power capacity, and accessing adequate funding.
The main issues raised were delays to grid connections, high UK energy costs, a mismatch between where power is available and where demand is growing, and regulation that can make short-term energy solutions harder to use. Small Modular Reactors (SMRs) were discussed as a possible longer-term option, but most felt they were unlikely to make a real difference before the late 2030s.
Beyond power, the wider delivery chain is under pressure too. Attendees pointed to shortages of key electrical components, long manufacturing lead times, limited MEP fit out and commissioning capacity, and a lack of experienced designers and commissioning engineers. They also raised concerns about workforce sustainability, especially high staff turnover and a lack of training.
London is still the UK’s main data centre hub, but future growth is likely to depend more on regional expansion, especially in the Midlands, the North of England and Scotland, where there is more land, and better access to power. Even so, most investment is still focused on London despite the growing pressure on capacity there.
The roundtable concluded that the UK still has major strengths, including strong investor interest, technical expertise and London’s position as a global connectivity hub. But there was also a clear warning: unless grid delivery speeds up, planning improves and government, regulators and industry work more closely together, more investment could start to move to international markets that are faster and more cost competitive.