Brookfield plans for a $27 billion AI data center at UK power station

Brookfield is targeting a massive artificial intelligence data center in the north of England, as Europe scrambles to develop infrastructure to support the rollout of AI amid high energy and land costs.

Energy company Drax Group said Tuesday it has signed an agreement with Brookfield and the asset manager's neocloud platform Radiant to jointly develop an AI data center on the Drax Power Station estate in North Yorkshire. London-listed shares of Drax were up 8.8% in early morning trading.

The project is initially targeting up to 100 megawatts of capacity to be operational from the first quarter of 2028, with an additional 500 MW of capacity to be brought online between 2028 and 2031. It is then looking to secure more than 1 gigawatt of capacity at the site by an unspecified date.

Brookfield estimates total investment, including semiconductors, could exceed £20 billion ($26.8 billion), with an initial £2.5 billion investment in phase 1.

"This is a unique opportunity for the UK's AI ecosystem to build at scale," Radiant CEO Mahdi Yahya said in a statement. "By designing, building and operating from the UK, it will give British researchers, startups and enterprises access to frontier compute at home."

The first phase of Brookfield's project in North Yorkshire will use power from the grid and target commercial customers from early 2028.

The initial phase is subject to planning, regulatory and network approvals from the government and relevant agencies, alongside securing a tenant for the project, Drax said in a statement said. The company added that final investment decisions are yet to be made.

While the U.S. has surged ahead on developing the huge data centers needed to power AI, Europe has been slower to break ground on the facilities. The U.K. in particular has struggled with high energy costs and challenges with long waiting times for businesses to connect to the grid.

In October, it was reported that Microsoft had pulled out of a deal to anchor an Nscale data center just outside London, amid delays connecting to the country's power grid. An Nscale spokesperson told CNBC at the time that it remained "committed" to the project and was "exploring alternative power sources for the site."

Unlike the U.K., the Nordics benefit from abundant power and available land. Countries in the region, like Finland, have seen major commitments to develop AI data centers this year. In September, Google said it would invest at least 13 billion euros ($15.1 billion) into AI infrastructure in the country, marking the tech giant's largest single investment in Europe.