UK's Healey offers faster grid access for key data centres in AI push

By Sam Tabahriti

LONDON, Oct 28 (Reuters) - Britain announced a fast-track plan for strategically important data centres on Wednesday, offering priority grid connections and planning support to boost AI computing capacity and stop sensitive defence and healthcare data being processed abroad.

Governments are increasingly treating access to computing power as a strategic priority because of AI's importance in economic growth, public services and national security.

Britain, which is the world's third-largest AI market after the United States and China, estimates it needs to triple its AI-capable data centre capacity by 2030 to avoid becoming overly reliant on overseas infrastructure.

Finance minister John Healey announced a British Data Centre Covenant, requiring operators to invest in local communities, create jobs and protect water supplies in return for priority grid connections and, where necessary, permission to build on-site power generation.

He said the aim was to keep AI processing of sensitive military and public services data in Britain.

"When the NHS (National Health Service) uses AI to treat patients, we want that data here. When our armed forces use AI to keep us safe, we want that data here," Healey told parliament as part of his annual budget.

POWER LIMITATIONS HOLDING BACK DATA CENTRE INVESTMENT

Britain has sought to position itself as a leading destination for AI investment, but industry executives and developers have previously pointed to delays to electricity connections as a major obstacle to new data centre projects.

While Britain hosts the largest data centre market in Western Europe with more than 520 facilities, the government says much of that infrastructure is not yet geared towards the power-hungry workloads required by advanced AI systems.

Earlier this month Microsoft abandoned plans to anchor a flagship Nvidia-backed Nscale data centre project in Essex after delays to a grid connection pushed the expected power supply date into the 2030s.

The covenant builds on the AI growth zones programme, which is designed to speed up planning approvals and electricity connections for AI infrastructure and has generated £28.2 billion of investment, according to the government.

(Reporting by Sam Tabahriti; Editing by Kate Holton)