Investment firm Blackstone has confirmed a $13.3bn (£10bn) deal to build a data centre in northern England on the site of a failed project to make electric batteries.
The move comes weeks after the UK classified data centres as critical national infrastructure, and follows a stark warning from Google that the UK is at risk of falling Falling behind in the AI race without more data centers.
The deal itself is not new, nor was it negotiated by the current government, despite the Labour administration's plans to boost investment in data centres to take advantage of the AI boom. The plans have been formally given the go-ahead green light last month.
The project was described by Blackstone in April (and yesterday when the formal announcement was made) as a “hyperscale” data center that will be one of the largest AI data centers in Europe.
Construction work on the data centre will begin next year and will create 4,000 jobs, of which 1,200 will be related to the construction of the site. In addition to the direct investment, Blackstone will contribute £110m to a local training and transport fund for the Blyth area.
Jon Gray, President and Chief Operating Officer of Blackstone, said: “The UK is a prime investment market for Blackstone due to its potent combination of talent and innovation coupled with a highly transparent legal system.”
Blackstone has invested heavily in AI infrastructure, with $55 billion in existing or under-construction data centers and another $70 billion in prospective development, much of it through operator QTS. which was acquired in 2021.
The CEO of the American asset management company, Stephen Schwarzman said in July which was “positioning itself to be the largest financial investor in AI infrastructure in the world.”
Investment in British data centres
Blackstone first revealed plans for the plant near Blyth, Northumberland, in April, after the collapse of Britishvolt. The company had intended to make batteries for electric cars at a former coal yard in the region.
Still, Blackstone's investment was welcomed by Prime Minister Keir Starmer as a positive sign of Britain's competitiveness in the global tech industry.
“A new investment like the one we have announced today with Blackstone is a huge vote of confidence in the UK and shows that Britain is once again a major player on the world stage and that we are open for business,” he said.
AWS earlier this month revealed his own plans will invest £8bn in UK data centre infrastructure over the next five years, with Google and Microsoft announcing £1bn investments earlier this year.
However, Blackstone's announcement comes after Google Report which warned that the UK government risks being left behind in the AI race without a comprehensive plan to boost investment in infrastructure and the workforce.
“AI-driven innovation could create more than £400 billion in economic value for the UK by 2030, deliver huge productivity gains across all sectors of the UK economy, help solve pressing societal problems and promote progress in fundamental sciences,” Debbie Weinstein, vice president and general manager of Google UK and Ireland, said at the time.
“But these benefits will not come automatically. To harness the full potential of AI, a comprehensive AI opportunities agenda will be needed.”