A newly released report, United Kingdom Data Centre Market – Investment Analysis & Growth Opportunities 2025-2030, forecasts a robust surge in the UK’s data centre sector, projecting a compound annual growth rate (CAGR) of 13.33% over the next five years. Valued at $10.69 billion in 2024, the market is expected to more than double to $22.65 billion by 2030, driven by rapid advancements in cloud computing, 5G, artificial intelligence (AI), and the Internet of Things (IoT), alongside the UK’s accelerating digitisation.
Government Initiatives Fuel Digital Expansion
The UK government is playing a pivotal role in this boom. The Digital Development Strategy 2024-2030, unveiled by the Foreign, Commonwealth & Development Office (FCDO) in March 2024, promotes digital transformation across multiple sectors, emphasizing inclusion, responsibility, and sustainability. Meanwhile, the Digital Economy Skills Action Plan 2023-2028 tackles a shortage of technical talent by expanding access to digital skills training and fostering collaboration between government, education, and business sectors.
Sustainability Takes Centre Stage
Sustainability is a cornerstone of this growth. The report highlights a shift towards greener practices, with the industry prioritising carbon neutrality. A notable example is the adoption of Hydro-treated Vegetable Oil (HVO) as a diesel alternative for backup generators. In December 2024, UK infrastructure provider AVK, in partnership with Rolls-Royce, deployed around 500 HVO-powered generators—a move expected to inspire other operators to embrace renewable backup power solutions and shrink the sector’s carbon footprint.
AI and Infrastructure Investment Surge
The rise of AI is another key driver. In November 2024, UK operator Latos announced plans to construct 40 AI-ready data centres by 2030 to meet soaring demand for facilities capable of handling complex, data-heavy AI tasks. Supporting this expansion, the government is bolstering power infrastructure, with a $1 billion investment announced in November 2023 to expedite grid connections for green industries—a critical step for data centres and beyond.
A Critical Role in the UK’s Future
The government’s designation of data centres as critical national infrastructure, alongside essentials like water and energy, underscores their importance to the UK’s digital economy. This status, combined with initiatives to enhance digitisation, is attracting major players like CloudHQ, Ada Infrastructure, Global Technical Realty, Digital Reef, Humber Tech Park, and SEGRO. These companies are expanding the UK’s data centre portfolio while advancing sustainable, AI-ready facilities.
Looking Ahead
As demand for digital services, AI, and green technology intensifies, the next five years promise innovation and collaboration in the UK data centre market. With sustainability and digital transformation at the forefront, the sector is poised to power the country’s technological future while meeting ambitious environmental goals.