Construction delays hit 40% of AI data centers as power infrastructure and labor shortages stall expansion

Construction delays hit 40% of US data centers planned for 2026

Silicon Valley has been pouring hundreds of billions of dollars into building ever-larger AI data centers that require as much electricity as hundreds of thousands of US homes -- but that massive buildout faces significant construction and power challenges along with growing local resistance. Now satellite imagery is showing how nearly 40 percent of US data center projects may fail to be completed this year as scheduled. The Financial Times drew upon satellite imagery from the geospatial data analytics company SynMax showing how much progress has been made in clearing land and laying building foundations for each data center project. It also cross-checked project progress against public statements and permit documents compiled by the industry research group IIR Energy. The resulting analysis revealed how major projects from tech companies such as Microsoft, Oracle, and OpenAI are "likely to miss completion dates by more than three months." Interviews with more than a dozen industry executives highlighted data center delays caused by "chronic shortages of labor, power and equipment" along with the process of securing the necessary permits, according to the Financial Times. Construction executives involved with OpenAI projects specifically mentioned not having enough tradespeople, such as electricians and pipe fitters, to work on multiple data center projects. The substantial power demand requirements of the planned data center buildout also represent a huge energy bottleneck, especially as utility companies struggle to build enough power generation and to expand the power infrastructure necessary to deliver more electricity. Tariffs on imported Chinese equipment such as transformers have only made the situation worse for Silicon Valley's AI ambitions. Many tech companies are even installing their own onsite power plants, with a heavy reliance on natural gas turbines. An analysis by the market intelligence platform Cleanview highlighted data center developers using mobile gas generators on semi trucks and turbine engines originally designed for aircraft and warships. There is also growing resistance from communities all across the US to data centers. For example, Virginia, known as "the data center capital of the world," has seen public opinion turn sharply against new data center development. In a recent poll, a majority of Virginians described concerns about data center land use and environmental impacts, along with worries about the negative impact on home electricity bills. It has now been well documented that data center development can pressure utility companies to raise electricity bills for all local and regional customers. The Trump administration responded to concerns about the energy costs surrounding data centers in March 2026 by announcing major tech companies as having signed on to a Ratepayer Protection Pledge, although the agreement lacks any meaningful legal enforcement or practical implementation. Microsoft on its own has pledged to pay the full electricity costs for its data centers in an effort to prevent broader rate increases for local communities. Such gestures have not stopped local lawmakers from considering statewide bans on data center development. Maine legislators recently became the first to pass an 18-month moratorium on approvals for new data centers requiring more than 20 megawatts of power, although Maine Governor Janet Mills must still decide whether to veto the legislation or let it become law.

Analytics group signals possible delays at 40% of AI data center construction sites -- companies deny schedule holdups, but satellite imagery indicates otherwise

Can these lofty timelines face the reality of labor and material shortages? Several U.S. data centers slated for completion in 2026 are at risk of being delayed as strict schedules encounter regulatory friction, supply chain bottlenecks, and the lack of available utility. According to a report by the Financial Times, major data center projects involving Microsoft, OpenAI, and other tech companies will miss projected deadlines by more than three months. The estimate is based on data from SynMax, a geospatial data analytics company that uses satellite imaging and AI to deliver real-time insights and predictive analytics on the maritime and energy sectors. Satellite imagery is used to estimate progress on various construction projects, looking for various milestones like land clearing and foundation work. It's then cross-checked against industry intelligence, including public statements, regulatory and permit documents, and on-the-ground interviews. For example, a 1,200-acre, 10-building campus is under construction in Shackelford County, Texas, for Oracle, which it will then equip for OpenAI. The entire project is expected to have a 1.4-GW capacity and a delivery date in the latter half of 2026, but imagery from early April 2026 shows that only six plots of land have been cleared for construction, with only one of them showing signs of development. SynMax estimates that one building could possibly be delivered by the end of the year, but a more realistic timeline sees this pushed to 2027. Another OpenAI-linked project, a 1.2-GW site in Milam County, Texas, is showing signs of slow progress, with only one building under construction as seen from space. The companies involved in these data center projects denied the reported delays. "Our historic data center build-out is on schedule and we will accelerate from here," OpenAI told the publication. "In partnership with Oracle, SB Energy and a broader ecosystem of partners, we are delivering rapid progress in Abilene, Shackelford County and Milam County in Texas." Oracle also said to FT, "Each data center we're developing for OpenAI is moving forward on time, and construction is proceeding according to plan," while SB Energy noted that "The Milam County Data Center is on schedule and on pace to be one of the fastest data centers of its kind ever delivered." People on the ground report otherwise, though. Construction executives report that the building sites are lacking in specialist workers like electricians and pipe fitters, an issue that has been reported since late 2025. Note that OpenAI's data center projects aren't the only ones apparently suffering from a delay, with another recent report claiming that half of planned U.S. data centers are reportedly being canceled or delayed because of shortages. Building the structures to house AI GPUs isn't the only bottleneck in building the data centers -- local utility providers are straining to catch up with the increased demand for electricity. Even though AI companies are supposedly paying for the needed infrastructure upgrades required to supply the massive amounts of electricity these data centers will consume, it will take time to order, deploy, and build the necessary systems that will deliver the power that AI GPUs demand. Some AI hyperscalers are turning to on-site generators like turbines as an alternative power source, but these require EPA permits, adding regulatory friction. Furthermore, jet engines are suffering from their own supply chain shortages, with orders from 2025 being slated for a 2028 to 2030 delivery. These delays do not mean that the projects will not be built, only that they will take longer than expected. This might get investors, who are pouring in trillions of dollars on these projects, feeling antsy, though, as they still cannot see the massive returns that they're expecting to materialize in the next few years, if these AI data centers can even turn a profit at all. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

UK firms to deploy AI projects abroad as energy costs rise

Brit firms look to run tech overseas as govt tries to support 'sovereign' creators One in five UK firms have already moved AI workloads abroad due to high energy costs, in findings likely to alarm a government counting on AI to drive economic growth. The warning is contained in the "Land, Power, Compute" report published by rent-a-GPU firm CUDO Compute, which naturally has skin in this game. The UK is a standout case, but the data - compiled by Censuswide, which canvassed senior AI decision makers in 700 organizations - spans the US and Europe too. The study reveals how the cost and availability of power is reshaping where AI infrastructure gets built, and where AI applications will ultimately live. Billions spent racing to acquire GPUs and cloud capacity are running into a hard constraint: in many places, the facilities to host them can't be built fast enough, held back by planning delays and slow grid connections. In Santa Clara, California - home of Nvidia - nearly 100 MW of newly constructed datacenter capacity is sitting empty, it claims, awaiting power connections that may not come for years. Energy costs are a particular concern in Britain, which has some of the highest prices in the developed world. And for AI infrastructure specifically, the impact is stark: a third of UK organizations say energy costs are limiting their ability to scale. Among AI-first companies, nearly a third (32 percent) indicate they are considering moving workloads overseas due to power costs - a direct threat to the UK government's ambitions to make Britain a global AI leader and use the technology to drive economic recovery. Yet around 30 percent are prioritizing sovereign or regionally controlled compute, even if it comes at a higher cost, showing that organizations do want to build in the UK but need the infrastructure to be there, CUDO claims. The US is rated as the most attractive location for new AI cluster provisioning, with three-quarters of respondents viewing it positively, followed by India. Eastern Europe also scores highly, with 58 percent seeing it as a positive location for AI deployment, above Western Europe on 45 percent, and the Nordics (44 percent). China also ranks highly with 55 percent of respondents thinking it a good location for AI projects. "AI sovereignty is being hotly discussed as a priority for UK organizations, but it only works if the infrastructure exists to support it," claimed CUDO Compute CEO Matt Hawkins. "What we are seeing is a growing tension between where businesses want to run AI and where they actually can." The problem isn't unique to the UK. Across the US and Europe, the same bottleneck recurs: land, power, cooling, compute, and permits rarely align in the same place at the same time. Even where governments are trying to accelerate delivery - the UK has streamlined planning and other incentives - physical infrastructure keeps falling behind demand. Infrastructure - power, networking and other energy related inputs, rather than GPU pricing - now drives most of the cost in AI deployment. This is reshaping where AI gets built: site selection is increasingly less about proximity to end users and more about proximity to available power, as The Register reported this week. Regions with spare grid capacity and available land are winning investment over established datacenter hubs. Cudo says nearly one in five survey respondents have already scaled back AI workloads due to energy costs, and more than a fifth claim energy bills account for more than a third of their AI infrastructure budgets. A third of respondents are actively evaluating alternative regions for AI deployment due to infrastructure considerations, and roughly a quarter claimed they would relocate entirely to secure renewable power. Organizations need to get all their ducks in a row when planning AI deployments and the infrastructure needed to support them, CUDO says - treating zoning, power procurement, and cooling engineering as core competencies rather than downstream logistics handled as an afterthought. ®

Insight: Powered land and zombie projects: Real estate in the age of AI

WILTON, England, April 24 (Reuters) - Land left dormant by the decline of the chemical industry in northeastern England has taken on a new lustre. Blessed with power plants, water and a grid connection, the site has just what it takes to house a start-of-the-art AI data center campus. That's what the owners of the Wilton International site in Teesside hope at least, but they are not alone. Across Britain, owners of industrial sites, speculative investors, property developers and even farmers are burnishing the credentials of their land to cash in on the billions of dollars tech giants plan to spend on AI data centers. According to construction analytics group Barbour ABI, plans for 119 data centers have been submitted, on sites as varied as a disused car plant, an old paint factory, a former Travelodge hotel and a retail centre near Heathrow Airport. Momentum grew last year after King Charles hosted Donald Trump and tech bosses at a banquet during the U.S. president's visit, with companies including Google, Microsoft (MSFT.O), opens new tab and Nvidia (NVDA.O), opens new tab all pledging to invest billions in Britain's digital infrastructure. The AI gold rush has spawned a whole new industry around data center wannabees, upended land valuations and created a logjam in the lengthy queue for grid connections, according to more than 20 interviews with data center operators, advisers, lawyers and investors. "The demand that's come through in the last couple of years - really because of AI - has exploded," said Andrew Groves at real estate adviser Bidwells. "Speculators and promoters have obviously seen it as an opportunity to make greater returns." While the financial services industry needs data centers to be nearby for the sake of speed, when it comes to artificial intelligence, the main requirement is processing power - which means AI data centers can be based further afield. That has the potential to breathe life into cheaper industrial sites in Britain far from London's elevated property prices and has also piqued the interest of rural landowners hoping a data center might pay better than farming. 'POWERED LAND' Wilton is one such site. The majority owner, utilities company Sembcorp UK, has been serving petrochemical customers for decades but the decline of the industry has now left it with spare land - and power. The site is what's being dubbed "powered land" - a plot that either has its own power generation or an existing high-voltage grid connection, or both. Working with data center ⁠developer Digital Reef, Sembcorp hopes to land a big tech firm - maybe a so-called hyperscaler - as a tenant to help build out a data center on the site, which is in one of the most economically deprived parts of Britain. "We're trying to develop something quite quickly, and bring jobs and industry and investment back," said Mike Patrick, CEO of Sembcorp UK, a subsidiary of Singapore's Sembcorp Industries (SCIL.SI), opens new tab. Hyperscalers are companies offering huge amounts of cloud computing capacity, including for AI, such as Amazon (AMZN.O), opens new tab, Apple (AAPL.O), opens new tab, Google, Meta (META.O), opens new tab and Microsoft - and they need a lot of power. "Wilton is almost uniquely placed in that it already has a large grid connection and on-site power assets," said Sembcorp UK Business Development Director Peter Ireton. "We think we can attract a large off-taker." But many sites with data center ambitions have no power. That's why there has been an explosion in applications for grid connections. Coupled with the need for upgrades to transmission circuits, the demand has pushed wait times for a connection out to 12 to 15 years. Britain's energy department said demand for connections leapt 460% in the first six months of 2025. Requests to join the high-voltage network rocketed to 96 gigawatts of capacity - with another 29 GW of demands to join local networks. For context, Britain's total generation capacity is estimated to be about 72 GW, though last year's peak demand was just under 46 GW, opens new tab. The National Energy System Operator said in March it had identified 140 data centers in the main queue, representing about 50 GW of capacity. It said that suggested speculative activity was boosting demand far beyond what the network can support and, in turn, delaying viable projects and slowing the energy transition. Some requests are from owners of land which has neither power, planning permission nor a potential end user. Dubbed "zombie projects", they're clogging up the system. "You've been seeing an awful lot of people speculating, spending time trying to get power onto a site," said Tom Glover, head of data centers for EMEA at U.S. real estate firm JLL (JLL.N), opens new tab. Aware of the issue, NESO launched plans in March, opens new tab to amend its application process to weed out speculative applications and prioritise strategic sectors, including data centers. A similar move last year to tidy up the queue for clean power projects wanting to join the grid cut those requests by half. GETTING CREATIVE WITH POWER Brokers said land with a power supply suitable for a data center has ⁠long carried a premium but AI demand and grid congestion has pushed it higher over the past few years. According to British real estate company Savills, London industrial land can sell for between 4.5 and 6 million pounds an acre. Savills and two other sources said that jumps to between 8 and 15 million pounds for land suitable for a data center. It's a similar story in the United States. According to a March report, opens new tab by real estate adviser Colliers, powered land is being sold for up to two and half times more than other industrial land - and that multiple jumps to over three times in northern Virginia and northern California. Other developers have had to be creative when it comes to getting power in Britain. The developer behind a site north of London bought by U.S. data center operator Equinix (EQIX.O), opens new tab had to join forces with a group with an allocated connection for a battery storage project and then switch it to a demand connection suitable for a data center before the deal went through. "Acquiring a development that has outline planning and a confirmed grid connection just effectively removes the risk," James Tyler, UK managing director at Equinix, told Reuters. The company plans to plough 3.9 billion pounds ($5.3 billion) into the development - its largest investment outside the United States. It hopes to break ground ⁠in early 2027 and have an operational data center in 2031. For others, even a guaranteed connection date is not always a cause for celebration. Dawn Childs, president of data center developer and operator Pure DC, said the offer of a connection date for one of its London projects was delayed about two years ago. About a third of the power on offer was unexpectedly pushed back by more than a decade and they had to figure out an alternative solution to make the site commercially viable, she said. 'IT'S HAPPENING' Data compiled for Reuters by DC Byte shows Britain is falling behind rival data center markets. Out of the 61 projects it has tracked in Britain since late 2022, only 7% are being built or have been completed. By contrast, 46% of Germany projects tracked by DC Byte are under construction or finished, it's 40% in France and 24% in ⁠the United States. That's a problem for the government, companies and big tech, all of which see major data centers as a way to modernise the economy and turn Britain into an AI Superpower The ballooning queue for a grid connection is not the only challenge. Britain also has some of the world's highest industrial electricity prices. OpenAI, which makes ChatGPT, hit pause this month on plans to build a large data center in northeastern England about 50 miles from the Wilton site due to concerns over high energy costs and regulation. Nevertheless, the industry consensus is that demand for AI remains genuine and the potential for sites offering power, planning and land is huge. All of which could be good news for Wilton. It has an existing 240 MW grid connection and its own on-site generation assets ⁠including gas, biomass and waste-to-energy plants. Sembcorp expects to be able to integrate nearby solar and wind power into its Wilton power mix as the data center development progresses and ultimately reach 1 GW. Digital Reef's founder Piers Slater said getting there would imply an investment of about 15 billion pounds over eight to 10 years. Discussions with potential data center operators were described by the partners as positive. "Obviously there's a lot of talk, is it a dot com? Is it a bubble?" Slater said. "But what we're seeing is the adoption of AI - and it's happening." ($1 = 0.7412 pounds) Reporting by Lucy Raitano in Wilton and Kate Holton in London; Additional reporting by Susanna Twidale in London; Editing by David Clarke Our Standards: The Thomson Reuters Trust Principles., opens new tab

Data centre delays threaten to choke AI expansion

Delays to a swath of new US data centres threaten to slow the rollout of AI by the world's biggest tech companies, with almost 40 per cent of all projects due this year at risk of falling behind schedule. Major projects for Microsoft, OpenAI and other tech groups are likely to miss completion dates by more than three months, according to data shared with the FT by SynMax, a satellite and AI analytics group. More than a dozen industry executives said campuses targeting hundreds of megawatts are being held up by permitting hurdles and chronic shortages of labour, power and equipment. The bottlenecks are emerging as a key constraint on how quickly companies can turn vast spending on AI into revenue, raising concerns that billions in planned investment will take longer than expected to generate returns. Hyperscalers are racing to build ever-larger data centres, pushing to bring facilities online that will draw at least 1 gigawatt of electricity -- roughly a nuclear reactor's output. A handful of such projects are expected to complete this year, according to research group Epoch, including developments by Amazon Web Services, Meta and Elon Musk's xAI. But likely delays at many others highlight a growing gap between the scale of investment in AI and operators' ability to deliver the infrastructure needed to support it. "Financing at this scale is hard," said Wes Cummins, chief executive of data centre operator Applied Digital. "Logistics are hard. Construction and operations are hard." To assess likely completion dates, SynMax uses satellite imagery to track construction progress from land clearing to foundation work. It cross-checks this against industry benchmarks compiled by IIR Energy, an industry research group, which tracks public statements, permit documents and conducts on-the-ground interviews. One of the most prominent is a 1.4GW campus in Shackelford County, Texas, being developed for Oracle, which will in turn equip it with chips and provide computing capacity to OpenAI. The 1,200-acre site is expected to host 10 buildings. Vantage Data Centers, the group constructing the site, in August said the first building was due for delivery in the second half of 2026. Satellite imagery shows land cleared for six planned facilities, but as of early April only one showed signs of development. SynMax estimates the earliest possible delivery date for the first building is December, while a timetable in line with most comparable projects would push it out to late 2027. Other OpenAI-linked campuses also appear to be progressing slowly. In Milam County, Texas, where Greg Brockman last month said a 1.2GW site was "taking shape", satellite imagery shows construction has begun on only one facility. Of the group's major Texas projects, only one in Abilene is expected to complete this year. OpenAI said: "Our historic data centre build-out is on schedule and we will accelerate from here. In partnership with Oracle, SB Energy and a broader ecosystem of partners, we are delivering rapid progress in Abilene, Shackelford County and Milam County in Texas." Oracle said: "Each data centre we're developing for OpenAI is moving forward on time, and construction is proceeding according to plan." SB Energy said: "The Milam County Data Center is on schedule and on pace to be one of the fastest data centres of its kind ever delivered." Two construction executives working on OpenAI-linked projects said there were not enough specialist workers, from electricians to pipe fitters, to meet demand across the build-out as companies race to construct clusters of increasingly large and complex facilities. Strained grid capacity and shortages of equipment such as gas turbines and transformers are also causing delays. Remote locations are pushing labour costs up as much as 30 per cent, they added. Doug O'Laughlin, president of SemiAnalysis, said the concentration of projects in some regions was intensifying competition even between providers serving the same end customer. "OpenAI is [in effect] competing with OpenAI," he said. "Workers are moving between projects in search of better pay cheques." "For those who stick around, even if they are doing double shifts, it's going to be hard to meet these schedules," he added. Nebius, a so-called neocloud that builds computing capacity for clients, struck a deal with Microsoft last year to make a 300MW facility in Vineland, New Jersey, successfully completing the first tranche of capacity by the end of 2025. Satellite imagery suggests the latest phases of the project are progressing more slowly, with structures in place but timelines slipping. Thermal imagery taken at the site indicates that equipment has yet to come online. The Vineland project has faced permitting challenges and local opposition. A formal public comment process has also been requested, a step that typically extends timelines and signals growing community resistance. Microsoft declined to comment. Nebius said: "All capacity tranches under our agreement with Microsoft to date have been delivered on time, and we currently expect to deliver the remaining tranches on schedule. As of now we are not aware of issues that would materially affect this." SynMax estimates more than 60 per cent of projects scheduled for next year have yet to begin construction, adding to concerns over delays to the industry's expansion pipeline. "There's a focus on speed and development brushing up against regulatory lag," said Josh Price, an energy director at Capstone, a strategy firm. "The scale and complexity of these projects is necessarily going to lead to more scrutiny and potentially delays." Cummins at Applied Digital said: "We're going to see a number of blow-ups and delays this year. My focus is on making sure it's not us."

Local political revolts threaten to derail US data center projects -- mounting delays are already costing AI hyperscalers billions

Rejected proposals, moratoriums, cancelled rezoning, rallies, and fliers are all hampering the AI build out. AI companies have a compute problem. As the usage of artificial intelligence is increasing among working adults in the U.S., computing power has become a precious resource that hyperscalers cannot ignore. To that end, we've seen a significant explosion in the number of planned data center projects throughout the globe. But those efforts are now facing roadblocks from local communities. Just this week, a small town in Missouri ousted half of its city council for not doing their due diligence in protecting local communities from the harms of AI data center construction, and they're pushing to remove the rest of them, the mayor included. A resident of Claremore, Oklahoma, was arrested in February for speaking too long during a town hall meeting to discuss a data center project. In Virginia, voter support for data centers has collapsed to just 35% from 69% in 2023, halting efforts to build what would have been one of the largest data centers in the country. Suffice to say, while major data center projects are the darling of tech CEOs and many politicians, the general populace is making its voice heard; through collective action, they are putting the brakes on $10's of billions of dollars of investment and derailing the plans of major corporations. As of the time of writing, half of all planned U.S. data center builds have been delayed. Making small voices heard 2025's major AI infrastructure announcements carried a measure of inevitability. OpenAI was investing $100 billion here, $300 billion there, and Nvidia's chips were going to consume tens of gigawatts of power the world over. Regardless of all the talk of circular investments surrounding these companies, the projects were going to go ahead, regardless. Politicians fawned over the big numbers and the growth potential these major companies would bring to their local areas. But while these data center projects might promise temporary construction jobs and investment in local communities, they also bring the potential for water contamination, skyrocketing energy prices, and even air pollution as companies ship in 'illegal' gas turbines just to get the servers up and running. So, local communities have pushed back in major ways. Where their local politicians would listen, they worked with them to halt these projects in their tracks. In Maine, Reuters reports that lawmakers recently passed a bill that would place a moratorium on new data centers over 20 megawatts in power being constructed until October 2027, giving time to conduct analyses on the construction process and how it might affect local communities and utilities. The Tulsa City Council ultimately issued a temporary moratorium on data center construction through the end of the year. A San Marcos city council voted in February to reject a rezoning effort that would have cleared the way to build a 200-megawatt data center next to a local power station. Parks over data centers Some of the voices calling for these data centers to be built are quite persuasive. Lawmakers argue that the projects can bring in tens of millions of dollars in local tax revenue, which could help unlock laundry lists of long-wished-for projects. Union construction workers are keen to see these multi-year megaprojects go ahead because of the guaranteed long-term work for their members. Developers are also claiming that fears of water contamination are unfounded and that noise pollution can also be kept to a minimum. Some companies, like Meta, are even bolstering their efforts by announcing small-scale grants for projects near their data centers. In a rural Brown County village, residents started getting offers of up to $120,000 per acre of land to sell up to a Delaware-based LLC linked with Cloverleaf Infrastructure, a company linked with another data center development in Port Washington, which has also received heavy local pushback. They didn't sell up, though, and Cloverleaf has since pulled out of the project entirely. In New Brunswick, a 22-acre site was under consideration for a data center project, but following fierce local pushback, the town council modified the proposal to mandate that a park be constructed instead. Determined opposition The pushback against these projects has been robust and coordinated, with often sizeable portions of local communities speaking at local events and town halls to voice their concerns. They aren't always successful, but even then, the opposition is fierce and ongoing, with residents showing a real willingness to continue fighting with projects even after construction has started. A major component of that is political retribution. The town councils and other local political figures who allowed projects to continue will be up for election before long. One resident of Calvert County, whose commissioners didn't vote through a moratorium on data center construction, waved goodbye to them from the microphone, prompting cheers. "You're not going [to] be here anymore," she told them, as the Washington Post reported. "You're out. You're gone." With primaries for elections of those positions in June, it may not take long for voter intention to be felt by those currently representing them. In the most violent examples of anti-AI pushback, OpenAI CEO Sam Altman's home was fire bombed, and a council member in Indianapolis received a threatening note and bullet holes in his home after voting through a data center project. Part of the public's ire surrounding Artificial Intelligence, and the data centers which support the industry, is that the technology is also becoming a scapegoat for job losses, as OpenAI's Sam Altman warned earlier this month. In the most recent example, the tech industry laid off almost 80,000 workers in the first quarter of 2026, with almost half of the expected positions cut, due to the reported impact of AI. Despite the wide public feedback, some lawmakers are onside with working hand-in-hand with local communities, ensuring their views are taken into consideration while plans are being made. However, if governments ignore them, the public response could plunge hyperscaler plans into jeopardy.

AI is reshaping Britain's datacenter map away from London

Bit barns need to worry more about space, access to grid - overstuffed center no longer a must, say experts UK AI datacenter capacity could migrate away from London as power shortages, planning constraints and reduced reliance on low-latency connections to financial firms make other locations more attractive. Britain's biggest city has been a magnet for server farms, with more than 80 percent of the island's total capacity located in the areas surrounding London. However power availability has started to become a problem, with datacenters and housing projects vying for the available resources, as The Register has previously reported. West London in particular is "beginning to reach saturation point," according to cloud and colocation biz Pulsant, with limited land and electrical grid capacity. The borough of Slough reportedly has up to 35 bit barns, and nearby Heathrow airport is another hotspot. Pulsant operates a number of facilities across the UK linked by a private network, so it has a certain amount of self-interest in seeing greater uptake outside the UK's major metropolis. Many AI use cases do not need a low latency connection into the City of London, and this is why the availability of land - and access to the grid - are starting to trump proximity to the capital for those operators looking to build out AI infrastructure. "A lot of organizations still default to London in early planning, then run into delivery friction. AI has made the power question impossible to defer. The smart move is to start with the workload, the latency tolerance and the power profile, then choose the geography that can deliver on those constraints," said Pulsant chief marketing officer Mark Lewis. The UK government's AI Opportunities Action Plan, which aims to drive economic recovery by positioning the country at the forefront of AI development, has added further impetus. This includes AI Growth Zones built around datacenter campuses, offering streamlined planning and priority grid access. But priority access requires available power so the Department for Science, Innovation and Technology (DSIT) outlined plans to offer targeted pricing support - effectively energy discounts - to steer operators toward locations where capacity exists. There are mismatches between the electricity generation capacity of some UK regions and the grid's ability to transmit that electricity elsewhere, DSIT claimed at the time. It cited Scotland's wind power resources as an example, saying this often exceeds transmission capacity. "When datacenters locate in Scotland and the north of England, they can harness this generation, and reduce the overall cost of our electricity system," the policy document states. Encouraging operators to set up shop in other parts of the UK is not a call to abandon London, Pulsant insists, but instead recognizes that clustering infrastructure into one region is a recipe for failure as power becomes contested and AI loads expand. At the same time, the UK's Science, Innovation and Technology Committee has opened an inquiry into whether emerging low-energy compute architectures could halt the spiralling power demands driven by the current AI trend. Just this month, ChatGPT developer OpenAI put on hold plans for a planned Stargate server farm project in the UK just months after announcing it, citing the cost of energy and regulatory environment. The UK has among the most expensive electricity in the world, according to the Institute of Economic Affairs (IEA), which previously reported that UK prices are some four times higher than those in the US. ®

Data centers now account for half of all new U.S. electricity use, just as Americans start to sour on AI | Fortune

The U.S. just had one of its most energy-hungry years in recent memory, and the largest single driver of demand happens to be a lightning rod. Energy demand in the U.S. grew 2% in 2025, according to a report on the global state of energy published Monday by the International Energy Agency (IEA), a watchdog outfit. While that's slower than 2024's 2.8% increase, last year's growth was the second-highest rate since 2000 excluding years that followed recessionary lulls. Tremendous energy demand in the U.S. was largely fueled by a huge increase in electricity needs across the country. Economic growth and a cold winter that required ample heating usage powered some of that rise, but the single largest contributor to the nation's additional power appetite last year was the rapid buildout of data centers, the critical server infrastructure tech companies are rolling out to train artificial intelligence models. Data centers accounted for around 50% of all electricity demand growth in the U.S. last year, according to the IEA, far surpassing the rise in electricity usage in the residential, industrial, and transport sectors. IEA also sees data centers continuing to account for half of U.S. electricity demand growth to 2030. The concentration of this growth in the U.S. highlights the country's role as the epicenter of the AI-driven construction boom, but also comes at a moment of friction. Just as the tech industry's hunger for power generation soars, the physical infrastructure required to satisfy it is meeting resistance. Data centers have become one of the flashpoints that underlie Americans' growing resentment towards AI and the industry developing the technology. Globally, the data center construction frenzy saw more than $61 billion invested last year, according to a December report by S&P Global, with the U.S. and Canada together responsible for more than $47 billion of that sum. That investment has contributed to a booming stock market, supported bottom lines at many companies, and even led to a hiring surge in fields such as construction and plumbing. But as the mood towards AI starts to sour, the tides have started turning against data centers as well. Citing their excessive power demands, water usage, and effect on property values, communities across the country have swelled in opposition against data center construction. A Pew survey last month found that while Americans are likely to have positive views on the potential local employment and tax revenue upsides of data centers, they are even more likely to have negative views regarding the infrastructure's environmental cost and its energy usage. The backlash has even become a political issue. Local opposition blocked or delayed at least 16 data centers last year, worth a combined total $64 billion. Last week, Maine lawmakers approved a proposal to implement a statewide moratorium on new data centers. If Governor Janet Mills allows it to become law, it might pave the way for a handful of other states to push forward their own legislation that would delay or halt construction, or otherwise give states more authority to weigh in on when and where data centers can be built. Last month, lawmakers in Congress proposed a regulatory tightening of data center construction nationwide as well. Frustrations over data centers could also play electoral spoiler as midterms loom later this year. Higher power bills are central to voters' rising affordability concerns. Electric and gas utilities requested more than $30 billion in rate increases last year, according to a January analysis by PowerLines, a consultancy, affecting 81 million Americans. Overall, power bills have risen 40% from 2021, the analysis found. A number of factors contribute to high utilities, including the costs of upgrading and managing outdated grid infrastructure, expenditures that were rising long before the AI boom kicked off. But data centers' ravenous energy needs have nonetheless received the brunt of the blame, with polling suggesting most households connect data center expansion with rising electricity costs. Lawmakers have acted accordingly, with bipartisan calls to monitor data center construction often packaged around affordability concerns. Declining sentiment towards data centers matches AI's similar fall from grace in the public sphere. Despite high excitement in the years following ChatGPT's release, opinion has turned on the technology as online misinformation and fears of job losses mount. Americans are more likely to be concerned than excited about AI, and more than half say they expect the technology to do more harm than good in the long run. Some are even redirecting anxieties towards the masters of the AI universe, highlighted by a Molotov cocktail lobbed at the home of OpenAI CEO Sam Altman last week. The energy frenzy is global, but particularly in the U.S. Data centers accounted for 17% of electricity demand growth worldwide last year, according to the IEA report, compared to around 50% in the U.S. The country's tech giants have gone full-steam ahead on data center construction in recent years, but with the public mood souring, the industry might soon struggle to find space to plug in its grand ambitions.

OpenAI slamming the brakes on UK data center plans sparks electrifying debate around the AI energy bill

Remember back in September last year when OpenAI announced Stargate UK, a major data center project at Cobalt Park in North Tyneside, part of a broader £31 billion tech investment package? It was going to deploy up to 8,000 GPUs initially, scaling to 31,000 and the UK Government punched the air in excitement at what it saw as an endorsement of its AI powerhouse economy ambitions. Flash forward to this month and OpenAI slammed the brakes on, blaming the cost of energy and regulation, both leading back to the door of that same government. In particular, the administration's green targets and Net Zero ambitions are being cited by critics on the back of the US firm's new announcement. Whatever the case, the bottom line is simple enough - OpenAI are not building in the world's third largest AI economy in the way it said it would a few months ago because it doesn't like the look of the electricity bill it would receive! Now, critics of OpenAI - there are one or two around! - might counter that this might actually be another example of the young firm being 'flexible' with its decisions and policies. Sora, anyone? Let's ask Disney about that one... But it is undeniable that the UK has the highest industrial electricity prices across the member states of the International Energy Agency (IEA), more than four times that of the US, Finland, Norway, and Sweden. So the UK is undeniably one of the more expensive places to do AI work from that point of view. Add to that the shortfall in established infrastructure - the UK's largest data center runs at 120 megawatts; current AI development plans start at 500 megawatts and could rise to a gigawatt without breaking sweat. Ofgem, the UK energy regulator, has warned that data center demand for AI goals will require more energy than is currently used by the whole country. Ofgem finds there are currently around 140 proposed data center schemes, each of which would want at least 50 gigawatts of electricity, exceeding the entire country's current peak demand. So, build more UK data centers! Good idea - tell that to local lobby groups protesting the environmental and climate impact of the type of massive building work that would entail. The process already takes a long time in the UK - up to two years to build a data center, another three, at least, to get connected to the grid - and that's without planning objections, injunctions, public inquiries etc etc. So, another option might be to move your AI ambitions elsewhere. Research house Oxford Economics has stated its view that hyperscalers may indeed look to the likes of the Nordics in search of lower energy costs, a threat to the GDP of both the UK and the European Union (EU): A US-style AI investment bonanza is unlikely in the EU because of planning and energy capacity constraints, though these are also likely to lead to greater diversification of data centre locations. The Nordics and parts of South Europe are attractive alternatives to the traditional Frankfurt, London, Amsterdam, Paris and Dublin cluster. And all of this is happening against a backdrop of ever-increasing demand to power the AI industry. The International Energy Agency (IEA), which explores AI's growing energy footprint and options for meeting data centre power demand, just published data showing that electricity consumption from AI data centers rose by 50% in 2025, and is on track to double by 2030. In the Key Questions on Energy and AI report, the IEA notes that CapEx from the five largest tech firms in the AI space rose to $400 million in 2025. Much to the horror of the Red Braces 'show us the money' brigade on Wall Street, that's a trend that that's going to continue for a long time to come with predictions of a 75% increase this year alone. That said, the IEA has good and bad news. The former: Energy consumption per AI query has declined massively, but much more energy-intensive use cases are becoming increasingly popular Measured per individual task, the energy efficiency of AI is improving at a rate unprecedented in energy history. Software and hardware advances have resulted in the energy use per AI task dropping by at least an order of magnitude annually in recent years. Simple text queries now typically consume less electricity than running a television over the same period of time. If all conventional internet searches were performed with simple AI text queries, it would consume less than 4 terawatt-hours (TWh) of electricity annually, equivalent to less than 1% of total data centre consumption today. But along comes agentic AI and all bets are back off: New energy-intensive AI applications are increasingly being launched and used, such as those for video generation, reasoning and agentic tasks. These kinds of tasks can consume hundreds or thousands of times more energy per query than simple text generation. The energy demand of AI is therefore the result of three rapidly evolving and uncertain trends: improvements in efficiency, surging uptake, and changing model capabilities, which can unlock new and, in many instances, far more energy-intensive use cases. To improve the robustness of the outlook for AI's energy demand, close monitoring, frequent updates and cooperation with the tech sector, including more systematic energy consumption disclosures, will remain important." But someone's got to pay the bill at the end of the day. The danger many fear is it will be the poor consumer who ends up with higher monthly bills, although this is an outcome that would be politically difficult to sell to the electorate. In the US, with the mid-terms looming, Trump 2.0 has paraded tech firms in front of the cameras to solemnly swear that they will shoulder the costs to power AI data center expansions., signing up to a "ratepayer protection pledge". Seven leading tech firms - Google, Microsoft, Meta, Oracle, xAI, OpenAI and Amazon - initially signed on to the pledge, which Washington insists will help keep utility bills down "very substantially" for the US consumer. It's good optics, but in practice the enforceability of this voluntary code of conduct is harder to guarantee. For example, enforcement would depend on state utility commissions and contract terms. But there are clear examples of tech giants looking to ensure that they do boost their own energy making and consumption capabilities. For example, Oracle recently announced an expanded fuel-cell power agreement with Bloom Energy that will supply up to 2.8 gigawatts of on-site clean electricity to support its AI infrastructure. Specializing in solid oxide fuel cells, Bloom Energy works via localized power systems that can be deployed faster than traditional power plants or grid expansion, reducing the time it will take for the likes of Oracle to reap the benefits of the connection. The firm has reported AI demand outstripping supply for multiple quarters so ramping up infrastructure is a critical factor. That's a common story across the AI sector and places companies like Bloom in a good competitive position in relation to traditional utility providers. As CEO K. Sridhar explained recently: Our growth has been fueled by seismic changes in customer attitudes towards power. Bring your own power has become the mantra for data centers and power hungry factories. On-site power has moved from being a decision of last resort to a vital business necessity. This shift has led large power users to seek Bloom to fulfill their needs. Our demand from data center and commercial and industrial or C&I customers is secular and growing. The firm has what he calls a "clear and simple promise" to customers with large time-to-power needs: Bloom will not be the bottleneck to your growth, and you can count on us to deliver timely power. We will deliver our power platform faster than you can build your greenfield facilities, be it an AI factory or a C&I (commercial and industrial) facility. We demonstrated this recently by delivering a hyperscale AI factory order in 55 days against a 90-day commitment and power for a large factory before they could complete construction and commence operation. That is quick time to power, the Bloom way. In short, we will continue to expand deliberately and with discipline, at a fraction of the cost and time it will take traditional legacy vendors...Bloom brings very clear competitive advantages that legacy providers that built their technology for the industrial age cannot adapt to. What's electrifying (sorry) about the current energy 'arms race' around AI is that grid capacity has so quickly evolved from being a commodity proposition, taken for granted, to a sought-after 'Holy Grail', the elusive nature of which has actually become a constraint to the sector. What we once saw as basic utilities are now, in theory, critical economic infrastructure once more.

Powered Land and Zombie Projects: Real Estate in the Age of AI

By Lucy Raitano and Kate Holton WILTON, England, April 24 (Reuters) - Land left dormant by the decline of the chemical industry in northeastern England has taken on a new lustre. Blessed with power plants, ⁠water and ⁠a grid connection, the site has just what it takes to house a start-of-the-art AI data center ⁠campus. That's what the owners of the Wilton International site in Teesside hope at least, but they are not alone. Across Britain, owners of industrial sites, speculative investors, property developers and even farmers are burnishing the credentials of their land to cash in on the billions of dollars tech giants plan to spend on AI data centers. According to construction analytics group Barbour ABI, plans for 119 data centers have been submitted, on sites as varied as a disused car plant, an old paint factory, a former Travelodge hotel and a retail centre near Heathrow Airport. Momentum grew last year after King Charles hosted Donald Trump and tech bosses at a banquet during the U.S. president's visit, with companies including Google, Microsoft and Nvidia all pledging to invest billions in Britain's digital infrastructure. The AI gold rush has spawned a whole new industry around data center wannabees, upended land valuations and created a logjam in the lengthy queue for grid connections, according to more than 20 interviews with data center operators, advisers, lawyers and investors. "The demand that's come through in the last couple of years - really because of AI - has exploded," said Andrew Groves at real estate adviser Bidwells. "Speculators and promoters ⁠have obviously seen it as an opportunity to ⁠make greater returns." While the financial services industry needs data centers to be nearby for the sake of speed, when it comes to artificial intelligence, the main requirement is processing power - which means AI data centers can be based further afield. That has the potential to breathe life into cheaper industrial sites in Britain far from London's elevated property prices and has also piqued the interest of rural landowners hoping a data center might pay better than farming. 'POWERED LAND' Wilton is one such site. The majority owner, utilities company Sembcorp UK, has been serving petrochemical customers for decades but the decline of the industry has now left it with spare land - and power. The site is what's being dubbed "powered land" - a plot that either has its own power generation or an existing high-voltage grid connection, or both. Working with data center developer Digital Reef, Sembcorp hopes to land a big tech firm - maybe a so-called hyperscaler - as a tenant to help build out a data center on the site, which is in one of the most economically deprived parts of Britain. "We're trying to develop something quite quickly, and bring jobs and industry and investment back," said Mike Patrick, CEO of Sembcorp UK, a subsidiary of Singapore's Sembcorp Industries. Hyperscalers are companies offering huge amounts of cloud computing capacity, including for AI, such as Amazon, Apple, Google, Meta and Microsoft - and they need a lot of power. "Wilton is ⁠almost ⁠uniquely placed in that it already has a large grid connection ⁠and on-site power assets," said Sembcorp UK Business Development Director Peter Ireton. "We think we can attract a large off-taker." But many sites with data center ambitions have no power. That's why there has been an explosion in applications for grid connections. Coupled with the need for upgrades to transmission circuits, the demand has pushed wait times for a connection out to 12 to 15 years. Britain's energy department said demand for connections leapt 460% in the first six months of 2025. Requests to join the ⁠high-voltage network rocketed to 96 gigawatts of capacity - with another 29 GW of demands to join local networks. For context, Britain's total generation capacity is estimated to be about 72 GW, though last year's peak demand was just under 46 GW. The National Energy System Operator said in March it had identified 140 data centers in the main queue, representing about 50 GW of capacity. It said that suggested speculative activity was boosting demand far beyond what the network can support and, in turn, delaying viable projects and slowing the energy transition. Some requests are from owners of land which has neither power, planning permission nor a potential end user. Dubbed "zombie projects", they're clogging up the system. "You've been seeing an awful lot of people speculating, spending time trying to get power onto a site," said Tom Glover, head of data centers for EMEA at U.S. real estate firm JLL. Aware of the issue, NESO launched plans in March to amend its application process to weed out speculative applications and prioritise strategic sectors, including data centers. A similar move last year to tidy up the queue for clean power projects wanting to join the grid cut those requests by half. GETTING CREATIVE WITH POWER Brokers said land with a power supply suitable ⁠for a data center has long carried a premium but AI demand and grid congestion has pushed it higher over the past few years. According to British real estate company Savills, London industrial land can sell for between 4.5 and 6 million ⁠pounds an acre. Savills and two other sources said that jumps to between 8 and 15 million pounds for land suitable for a data center. It's a similar story in the United States. According to a March report by real estate adviser Colliers, powered land is being sold for up to two and half times more than other industrial land - and that multiple jumps to over three times in northern Virginia and northern California. Other developers have had to be creative when it comes to getting power in Britain. The developer behind a site north of London bought by U.S. data center operator Equinix had to join forces with a group with an allocated connection for a battery storage project and then switch it to a demand connection suitable for a data center before the deal went through. "Acquiring a development that has outline planning and a confirmed grid connection just effectively removes the risk," James Tyler, UK managing director at Equinix, told Reuters. The company plans to plough 3.9 billion pounds ($5.3 billion) into the development - its largest investment outside the United States. It hopes to break ground in early 2027 and have an operational data center in 2031. For others, even a guaranteed connection date is not always a cause for celebration. Dawn Childs, president of data center developer and operator Pure DC, said the offer of a connection date for one of its London projects was delayed about two years ago. About a third of the power on offer was unexpectedly pushed back by more than a decade and they had to figure out an alternative solution to make the site commercially viable, she said. 'IT'S HAPPENING' Data compiled for Reuters by DC Byte shows Britain is falling behind rival data center markets. Out of the 61 projects it has tracked in Britain since late 2022, only 7% are being built or have been completed. By contrast, 46% of Germany projects tracked by DC Byte are under construction or finished, it's 40% in France and 24% in the United States. That's a problem for the government, companies and ⁠big tech, all of which see major data centers as a way to modernise the economy and turn Britain into an AI Superpower The ballooning queue for a grid connection is not the only challenge. Britain also has some of the world's highest industrial electricity prices. OpenAI, which makes ChatGPT, hit pause this month on plans to build a large data center in northeastern England about 50 miles from the Wilton site due to concerns over high energy costs and regulation. Nevertheless, the industry consensus is that demand for AI remains genuine and the potential for sites offering power, planning and land is huge. All of which could be good news for Wilton. It has an existing 240 MW grid connection and its own on-site generation assets including gas, biomass and waste-to-energy plants. Sembcorp expects to be able to integrate nearby solar and wind power into its Wilton power mix as the data center development progresses and ultimately reach 1 GW. Digital Reef's founder Piers Slater said getting there would imply an investment of about 15 billion pounds over eight to 10 years. Discussions with potential data center operators were described by the partners as positive. "Obviously there's a lot of talk, is it a dot com? Is it a bubble?" Slater said. "But what we're seeing is the adoption of AI - and it's happening." ($1 = 0.7412 pounds) (Reporting by Lucy Raitano in Wilton and Kate Holton in London; Additional reporting by Susanna Twidale in London; Editing by David Clarke)

Permitting Hurdles and Labor Shortages Threaten AI Data Center Timelines | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The company also found that 60% of projects scheduled for next year have not yet begun construction, according to the report. SynMax uses satellite imagery to track construction progress and cross-checks this information against benchmarks compiled by industry research group IIR Energy to assess likely completion dates, per the report. Industry executives interviewed by the FT said delays are being caused by problems around permitting, local opposition and shortages in labor, power and equipment. However, four companies involved in the development of data centers told the FT their projects are on track. When asked about their projects by the FT, OpenAI, Oracle, digital infrastructure and energy platform SB Energy and AI cloud company Nebius said the projects are on schedule. This report comes at a time when the market for AI infrastructure is booming. It was reported April 1 that as the demand for AI services continues to surge, companies are facing a shortage of data center space that is restraining their business. As a result, companies such as Meta, Google and Amazon recently said they plan to spend tens of billions of dollars more this year than they expected to meet the demand of AI. It was reported on April 10 that alternative asset manager Blackstone is considering a $2 billion initial public offering (IPO) for an acquisition company that would buy data centers. PYMNTS reported in October that as demand for AI training large models rises, traditional providers such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud are facing limits in available capacity. This gap has created an opportunity for smaller infrastructure firms known as "neoclouds" that lease clusters of graphics processing units (GPUs) to AI developers and enterprises that need computing resources on short notice. PYMNTS reported in November 2024 that tech firms and other companies that depend on AI for their daily operations were facing infrastructure bottlenecks cause in part by America's outdated power grid. While foreign markets move quickly to build power systems for next-generation computing facilities, American utilities have lengthy deployment pipelines for new electrical capacity.

Powered land and zombie projects: Real estate in the age of AI

WILTON, England, April 24 (Reuters) - Land left dormant by the decline of the chemical industry in northeastern England has taken on a new lustre. Blessed with power plants, water and a grid connection, the site has just what it takes to house a start-of-the-art AI data center campus. That's what the owners of the Wilton International site in Teesside hope at least, but they are not alone. Across Britain, owners of industrial sites, speculative investors, property developers and even farmers are burnishing the credentials of their land to cash in on the billions of dollars tech giants plan to spend on AI data centers. According to construction analytics group Barbour ABI, plans for 119 data centers have been submitted, on sites as varied as a disused car plant, an old paint factory, a former Travelodge hotel and a retail centre near Heathrow Airport. Momentum grew last year after King Charles hosted Donald Trump and tech bosses at a banquet during the U.S. president's visit, with companies including Google, Microsoft and Nvidia all pledging to invest billions in Britain's digital infrastructure. The AI gold rush has spawned a whole new industry around data center wannabees, upended land valuations and created a logjam in the lengthy queue for grid connections, according to more than 20 interviews with data center operators, advisers, lawyers and investors. "The demand that's come through in the last couple of years - really because of AI - has exploded," said Andrew Groves at real estate adviser Bidwells. "Speculators and promoters have obviously seen it as an opportunity to make greater returns." While the financial services industry needs data centers to be nearby for the sake of speed, when it comes to artificial intelligence, the main requirement is processing power - which means AI data centers can be based further afield. That has the potential to breathe life into cheaper industrial sites in Britain far from London's elevated property prices and has also piqued the interest of rural landowners hoping a data center might pay better than farming. 'POWERED LAND' Wilton is one such site. The majority owner, utilities company Sembcorp UK, has been serving petrochemical customers for decades but the decline of the industry has now left it with spare land - and power. The site is what's being dubbed "powered land" - a plot that either has its own power generation or an existing high-voltage grid connection, or both. Working with data center developer Digital Reef, Sembcorp hopes to land a big tech firm - maybe a so-called hyperscaler - as a tenant to help build out a data center on the site, which is in one of the most economically deprived parts of Britain. "We're trying to develop something quite quickly, and bring jobs and industry and investment back," said Mike Patrick, CEO of Sembcorp UK, a subsidiary of Singapore's Sembcorp Industries. Hyperscalers are companies offering huge amounts of cloud computing capacity, including for AI, such as Amazon, Apple, Google, Meta and Microsoft - and they need a lot of power. "Wilton is almost uniquely placed in that it already has a large grid connection and on-site power assets," said Sembcorp UK Business Development Director Peter Ireton. "We think we can attract a large off-taker." But many sites with data center ambitions have no power. That's why there has been an explosion in applications for grid connections. Coupled with the need for upgrades to transmission circuits, the demand has pushed wait times for a connection out to 12 to 15 years. Britain's energy department said demand for connections leapt 460% in the first six months of 2025. Requests to join the high-voltage network rocketed to 96 gigawatts of capacity - with another 29 GW of demands to join local networks. For context, Britain's total generation capacity is estimated to be about 72 GW, though last year's peak demand was just under 46 GW. The National Energy System Operator said in March it had identified 140 data centers in the main queue, representing about 50 GW of capacity. It said that suggested speculative activity was boosting demand far beyond what the network can support and, in turn, delaying viable projects and slowing the energy transition. Some requests are from owners of land which has neither power, planning permission nor a potential end user. Dubbed "zombie projects", they're clogging up the system. "You've been seeing an awful lot of people speculating, spending time trying to get power onto a site," said Tom Glover, head of data centers for EMEA at U.S. real estate firm JLL. Aware of the issue, NESO launched plans in March to amend its application process to weed out speculative applications and prioritise strategic sectors, including data centers. A similar move last year to tidy up the queue for clean power projects wanting to join the grid cut those requests by half. GETTING CREATIVE WITH POWER Brokers said land with a power supply suitable for a data center has long carried a premium but AI demand and grid congestion has pushed it higher over the past few years. According to British real estate company Savills, London industrial land can sell for between 4.5 and 6 million pounds an acre. Savills and two other sources said that jumps to between 8 and 15 million pounds for land suitable for a data center. It's a similar story in the United States. According to a March report by real estate adviser Colliers, powered land is being sold for up to two and half times more than other industrial land - and that multiple jumps to over three times in northern Virginia and northern California. Other developers have had to be creative when it comes to getting power in Britain. The developer behind a site north of London bought by U.S. data center operator Equinix had to join forces with a group with an allocated connection for a battery storage project and then switch it to a demand connection suitable for a data center before the deal went through. "Acquiring a development that has outline planning and a confirmed grid connection just effectively removes the risk," James Tyler, UK managing director at Equinix, told Reuters. The company plans to plough 3.9 billion pounds ($5.3 billion) into the development - its largest investment outside the United States. It hopes to break ground in early 2027 and have an operational data center in 2031. For others, even a guaranteed connection date is not always a cause for celebration. Dawn Childs, president of data center developer and operator Pure DC, said the offer of a connection date for one of its London projects was delayed about two years ago. About a third of the power on offer was unexpectedly pushed back by more than a decade and they had to figure out an alternative solution to make the site commercially viable, she said. 'IT'S HAPPENING' Data compiled for Reuters by DC Byte shows Britain is falling behind rival data center markets. Out of the 61 projects it has tracked in Britain since late 2022, only 7% are being built or have been completed. By contrast, 46% of Germany projects tracked by DC Byte are under construction or finished, it's 40% in France and 24% in the United States. That's a problem for the government, companies and big tech, all of which see major data centers as a way to modernise the economy and turn Britain into an AI Superpower The ballooning queue for a grid connection is not the only challenge. Britain also has some of the world's highest industrial electricity prices. OpenAI, which makes ChatGPT, hit pause this month on plans to build a large data center in northeastern England about 50 miles from the Wilton site due to concerns over high energy costs and regulation. Nevertheless, the industry consensus is that demand for AI remains genuine and the potential for sites offering power, planning and land is huge. All of which could be good news for Wilton. It has an existing 240 MW grid connection and its own on-site generation assets including gas, biomass and waste-to-energy plants. Sembcorp expects to be able to integrate nearby solar and wind power into its Wilton power mix as the data center development progresses and ultimately reach 1 GW. Digital Reef's founder Piers Slater said getting there would imply an investment of about 15 billion pounds over eight to 10 years. Discussions with potential data center operators were described by the partners as positive. "Obviously there's a lot of talk, is it a dot com? Is it a bubble?" Slater said. "But what we're seeing is the adoption of AI - and it's happening." (Reporting by Lucy Raitano in Wilton and Kate Holton in London; Additional reporting by Susanna Twidale in London; Editing by David Clarke)