UK Plans £10 Billion Wales Data-Center Hub in AI Push
(Bloomberg) -- The UK plans to open a data center campus in south Wales, with developer Vantage Data Centers spending £10 billion ($13.1 billion) for facilities near a Microsoft Corp. site.
The new hub is part of the Labour government’s ongoing attempt to shore up Britain’s technology sector. The government also announced that it would allocate £250 million to buy computing resources for UK startups and researchers working on artificial intelligence. Another funding pot will subsidize the use of AI for drug discovery and treatments, the Department for Science, Innovation and Technology said on Thursday.
Kanishka Narayan, the UK’s AI minister — who represents the south Wales constituency Vale of Glamorgan — described the announcements as an effort to diversify tech activity across a country whose resources are mostly concentrated in London and university cities. The government wants to bet on fields where the UK has the most potential, such as semiconductor design and biotech.
“We’re focusing on sectors where we have amazing strengths,” Narayan said in an interview.
Labour has leaned on tech as a vehicle for economic growth as the party looks to patch up a fiscal deterioration of £20 billion and combat lagging poll numbers. While the UK has some prominent AI labs and startups, many British tech companies turn overseas for later-stage funding.
Tech investors have complained that Labour’s policies risk sending entrepreneurs fleeing and limiting financing opportunities — although the day also brought news that entrepreneurs and high-earners would get a fast-tracked path to UK residency.
Narayan pointed to tech companies that pledged on Thursday to open offices in the UK or expand operations there, such as startup Perplexity AI and AI-coding company Cursor, as well as chipmakers Cerebras and Groq Inc.
A central part of the government’s plan has been what it calls AI Growth Zones — regions for developing tech infrastructure with fast-track planning approvals and privileged access to the electricity grid. The new site in south Wales is the fourth such zone the government has announced.
While the site is new, the spending pledges aren’t. The government said Vantage Data Centers is planning to spend £10 billion on the new site, part of a £12 billion commitment the company made in the UK earlier this year. A Vantage representative didn’t immediately return a request for comment.
Microsoft said in 2023 that it would invest £2.5 billion into UK data centers over the next three years. That includes a site in Newport, Wales, according to a company spokesperson, near where the national statistics agency has its headquarters.
In September, during a visit by President Donald Trump, the UK government touted £31 billion in investment pledges from US tech companies.
Britain remains one of the most expensive energy markets in Europe, a handicap in its ability to power major data centers. Earlier this month, the government announced plans to offer discounted power rates for companies building facilities in regions where the grid generates excess capacity.
“The economics of investing in British AI have radically improved,” Narayan said.
His department said the new site in Wales will create more than 5,000 jobs over the next decade. The project will include multiple sites with the “potential to harness” more than a gigawatt of computing power by the “early 2030s,” Jo Stevens, the Secretary of State for Wales, said in a statement.
©2025 Bloomberg L.P.
