Investment company Blackstone has confirmed a $13.3bn (£10bn) deal to build a data center in the north of England on the site of a failed venture to build electric batteries.
The move comes weeks after the UK classed data centers as critical national infrastructure, and follows a stark warning from Google that the UK risks falling behind in the AI race without more data centers.
The deal itself isn't new — nor was it negotiated by the current government, despite the Labour administration's plans to encourage data center investment to take advantage of the AI boom. The plans were formally given the green light last month.
The project was described by Blackstone in April — and yesterday as the formal announcement was made — as a "hyperscale" data center that will be one of the largest AI data centers in Europe.
Work building the data center will begin next year, creating 4,000 jobs, of which 1,200 will relate to the construction of the site. Alongside the direct investment, Blackstone will contribute £110m to a local skills and transport fund for the Blyth area.
Jon Gray, President and Chief Operating Officer of Blackstone, said: "The UK is a top investment market for Blackstone because of its powerful combination of talent and innovation along with a highly transparent legal system."
Blackstone has heavily invested in AI infrastructure, with $55bn in existing or under construction data centers as well as a further $70bn in prospective development, largely via operator QTS, which it acquired in 2021.
The American asset management firm's CEO Stephen Schwarzman said in July that it was "positioning itself to be the largest financial investor in AI infrastructure in the world."
British data center investment
Blackstone first revealed plans for the site near Blyth, Northumberland, in April after Britishvolt collapsed. That company had intended to build electric car batteries on an old coal yard in the region.
Still, the investment from Blackstone was welcomed by PM Keir Starmer as a positive sign of the UK’s competitiveness in the global technology industry.
"New investment such as the one we’ve announced with Blackstone today is a huge vote of confidence in the UK and it proves that Britain is back as a major player on the global stage and we’re open for business,” he said.
AWS earlier this month unveiled its own plans to invest £8bn in data center infrastructure in the UK over the next five years, with Google and Microsoft announcing billion-pound investments earlier this year.
However, the Blackstone announcement follows a report by Google that warned the UK government risks falling behind in the AI race without a comprehensive plan to boost investment in infrastructure and the workforce.
"AI-powered innovation could create over £400 billion in economic value for the UK by 2030, deliver enormous productivity gains across all sectors of the UK economy, help to solve pressing societal issues and advance progress in fundamental sciences," Debbie Weinstein, vice president and managing director at Google UK & Ireland, said at the time.
"But these benefits will not come automatically. To realize AI’s full potential, a comprehensive AI opportunity agenda will be required."
