U.S. private equity firm Blackstone (BX.N) has announced a significant £10 billion ($13.3 billion) investment to establish an artificial intelligence (AI) data centre in northeast England, according to a statement from the British prime minister's office on Wednesday. The project, which is set to begin next year, is expected to generate 4,000 new jobs, with 1,200 positions dedicated to the construction phase.
During his visit to New York, Prime Minister Keir Starmer highlighted the economic impact of the data centre, emphasizing its role in the region’s development.
AI Data Centres: A Growing Opportunity for Commercial Real Estate
Energy-intensive AI data centres are emerging as a lucrative investment for commercial real estate players like Blackstone, particularly as other assets, such as post-pandemic office spaces, have seen declining value. Blackstone’s investment aligns with a broader trend where data infrastructure is driving growth in previously underdeveloped sectors.
Site Repurposed After Britishvolt Collapse
Earlier this year, Blackstone proposed building the "hyperscale" data centre on a derelict site in Blyth, Northumberland. This location was initially planned for a large-scale electric vehicle battery factory, but those ambitions were halted when UK startup Britishvolt went bankrupt in 2022, dealing a blow to the nation's efforts to establish a domestic battery industry.
Additional £110 Million Pledged for Local Development
In addition to the data centre, Blackstone will contribute £110 million to a local fund aimed at enhancing skills training and improving transportation infrastructure in Blyth, further boosting the region's economic prospects. Jon Gray, president and COO of Blackstone, confirmed the investment, stressing its potential to drive both economic growth and innovation in the UK.
With inputs from Reuters
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