At a recent government investment event, four prominent US technology firms announced plans to invest $6.3 billion in data centre projects across Britain. These facilities, often overlooked, play a pivotal role in supporting our digital infrastructure.

CyrusOne, ServiceNow, CoreWeave, and CloudHQ are capitalizing on the growing demand for data centres in the UK, reflecting our increasing reliance on digital technology.

The government boasted that this investment would accelerate the UK’s AI development by providing essential infrastructure for training advanced AI systems and deploying complicated machine learning models.

However, this announcement has sparked discussions within the industry regarding logistical challenges.

While securing funds is relatively straightforward, questions arise about the impact on the UK’s existing infrastructure, particularly regarding energy supply—a concern articulated by John Pettigrew, chief executive of National Grid, who referred to it as “constrained”.

Data centres were designated as critical national infrastructure last month, equating their importance with that of utilities. This classification ensures government intervention if connectivity is threatened.

Rohan Kelkar, executive vice-president of power products at Schneider Electric, cautioned that the insufficient grid capacity poses risks to the UK’s aspirations for AI development and energy transition.

The situation has led local councils in Hillingdon, Ealing, and Hounslow to reject proposed data centre projects to prioritize energy supply for residential areas, a trend that is not exclusive to the UK.

In Ireland, the situation is equally pressing, with authorities pausing some data centre approvals due to concerns that the rising demand could risk nationwide blackouts.

Across the Atlantic, tech giants are facing similar energy challenges, aiming to secure low-carbon, dependable energy sources for their data-heavy operations without compromising customer service or sustainability goals.

Currently, many companies are looking to nuclear power as a viable solution, alongside renewable energy and enhanced battery storage.

Recently, Microsoft entered a partnership to revive a unit of the Three Mile Island plant in Pennsylvania, and earlier this year, Amazon purchased a data centre powered by nuclear energy.

Now, Google has joined the ranks by announcing a nuclear energy initiative aimed at powering its data centres, exploring mini-reactors developed by a Californian firm. With advancements in technology, similar developments could emerge in the UK.

Rolls-Royce is leading the way in mini-reactor technology and is already engaging with UK operators about potential deployment.

While mini-nukes have not been economically viable in the past, the surge in demand for data centres has made their adoption more feasible.

Additionally, advancements in latency have diminished the geographical constraints of data centre locations, enabling operations in previously inaccessible areas.

Presently, the primary challenges in establishing data centres revolve around planning and connecting to the grid. An independent nuclear power source could alleviate some of these connection issues, allowing for construction in isolated regions.

By integrating a reactor within a data centre, operators could mitigate the unpredictability associated with fluctuating energy costs, which have increased significantly in recent years.

While the potential benefits are clear, the rollout of small nuclear reactors faces significant hurdles. According to Rolls-Royce, these technologies are still at least a decade away from becoming operational in the UK.

In the meantime, the persistent challenges associated with connecting to the “constrained” grid will remain a critical concern for those looking to establish new data centres.