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How can the UK seize the digital infrastructure opportunity?

How can the UK unlock digital infrastructure investment? Explore the barriers, risks, and opportunities shaping data centre growth and global competitiveness.

With an estimated US$3 trillion expected to be invested in data centre infrastructure worldwide by 2030, how can the UK make the most of that opportunity and compete for global investment?

The UK has made AI a key feature of its plans for economic growth. But as demand for AI accelerates, so does the need for the data centres that underpin it. Delivering these at the scale and speed required to remain competitive on the world stage was the focus of Marsh’s recent Digital Infrastructure roundtable, which convened participants from government, investment, development, and insurance.

With the Prime Minister promising to deliver “good growth in every postcode,” the discussion explored the role digital infrastructure could play in driving growth across the UK. The country is undoubtedly ripe for opportunity, both in building digital infrastructure and providing the services that enable its development. Capitalising on it, however, will mean tackling various blockers holding projects back, while ensuring local communities understand why new infrastructure is needed, and can see the tangible benefits it can bring.

What is getting in the way?

The UK’s physical networks are struggling to keep pace with its technological goals. A recent techUK report shows the UK faces grid connections wait times of up to eight years, while industrial electricity prices sit 63% above the international median.

These challenges were echoed in the conversation, with power availability repeatedly highlighted as a major barrier to delivery. But power is not the only issue. Planning delays, policy uncertainty and access to the talent and skills needed to build and operate new facilities could all affect progress, particularly when US customers expect that “you can go faster, you can go bigger, you can go quicker.”

Meeting demand at the volume and pace customers expect will require a more joined-up approach. Participants discussed how aligning land, power, planning, and construction from the outset would allow various parts of a project to progress simultaneously, rather than waiting for one stage to finish before the next can begin.

Financing growth and managing risk

The amount of capital required is changing how digital infrastructure is financed. Funding is now moving beyond hyperscalers: as development costs rise, even the largest technology companies are looking beyond their own balance sheets to finance expansion. This brings a broader range of investors to the market. Naturally, this comes with greater scrutiny, as investors want to understand the financial strength of individual projects and whether the returns justify the risks.

The sheer size and interconnectedness of the sector are also raising new questions about how those risks are financed and insured. Traditional insurance, financing models, and existing products do not always map neatly onto emerging risks, leaving the sector playing “catch-up.”

For insurers, the challenge will only grow as more facilities become operational, and participants questioned whether there will be sufficient cover for business interruption as more come online. Instead of viewing power, construction, and other exposures in separate silos, it was suggested that insurers could bring their risk management expertise together across industry verticals to enable them to provide cover that better reflects individual developments.

At the moment, limited data is a significant issue for insurers. It makes potential losses harder to assess and cover harder to confidently price up, so better data and closer engagement with customers could help reduce that uncertainty, support more effective cover and help lower the cost of capital. And with much new capacity anticipated in the next 18-24 months, the industry now has a window to anticipate and prepare for the operational “pain points” that could follow.

The role of the UK and London

Before it can fully capitalise on the opportunity, the UK needs to be clearer on what it wants to prioritise. Cloud infrastructure and AI training capacity, for example, require different approaches to location, power, and connectivity. Greater clarity over where the UK wants to compete could help align policy and infrastructure decisions and give investors more of the certainty they seek.

Meanwhile, the wider UK technology sector itself is of course underpinned by digital infrastructure. AI and other emerging technology businesses cannot grow without it, so delays to its development could hinder the growth of the sector, which is a concern.

There is also the question of capital. Although the UK has significant pools of investment capital, participants questioned whether enough of it is finding its way into digital infrastructure. As one participant suggested: “the two are not plumbed together.”

London’s depth of financial and risk expertise gives the UK a role beyond developing physical infrastructure on home turf. The group agreed that the city is well-placed to help finance and manage the risks associated with digital infrastructure globally.

Community support and delivery for the long-term

Securing public support was raised as an essential part of the equation, with participants pointing to the increasing anti-data centre activism in markets like the US and Europe - which in some cases has resulted in data centres being blocked. Opposition and scrutiny are gathering pace in the UK too, making it ever more important to explain clearly why this infrastructure is needed and how communities will benefit.

That means explaining why digital infrastructure is now an essential feature of everyday life, while taking people’s very legitimate concerns around environmental impact and power use seriously. Developments need to respond to their local context and minimise their impact, including through cleaner power and responsible energy use. Similarly, the industry must demonstrate more clearly what communities stand to gain, from jobs and local supply chains to investment in the areas hosting these facilities.

There is a broader regional dimension to this as well. Digital infrastructure could contribute to regional growth and the UK’s wider reindustrialisation, helping to make the government’s aim for “good growth in every postcode”, more tangible.

Speed is of the essence

The global market is moving rapidly, but the UK’s share is not guaranteed, so “pace and urgency” are critical. Despite the speed of change, there was a sense around the table that “we are still in the very early part of the wave.”

That puts a premium on the decisions being made now. While none of the issues raised were necessarily a surprise, participants called for faster, more joined-up action across government and industry. Speed cannot come at the expense of longer-term thinking, though. As new facilities come online, attention must turn to how they are operated and maintained, as well as managing the longer-term risks that come with rapidly evolving technology.

Despite the breadth of challenges, there was optimism in the room, with participants commenting that the discussion had “reinvigorated” the impetus behind this agenda. The group agreed that the task now is to make the opportunity “legible and sustainable” across policy, investment, and balance sheets, turning a complex set of challenges into practical problems that can be solved.

The UK has a window of opportunity, but it will not stay open indefinitely. Other countries are already moving quickly when it comes to turning their ambitions into infrastructure. If the UK wants to compete for global investment, it must do the same.

Contact our digital infrastructure specialists to discuss how the UK can unlock investment, manage risk, and seize this opportunity.

Data center filled with servers and network equipment

Article

How can the UK seize the digital infrastructure opportunity?

What is getting in the way?

Financing growth and managing risk

The role of the UK and London

Community support and delivery for the long-term

Speed is of the essence

Our people

Lisa Quest

Michael Mathews

Michael Moloney

Alex Edwards

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