Could 2025 be a defining year for data centres? That’s certainly the opinion of Stewart Laing, CEO of Asanti Data Centres, who explores what he thinks will be the big themes this year. 

 When the BBC’s World at One team visited our Farnborough data centre in October, we talked at length about the vital role data centres play in the UK’s digital future. Our conversation touched on everything from the growing demand for data storage to the complexities of energy consumption and the emerging challenges presented by (artificial intelligence) AI.

There’s no doubt that 2025 will be a defining year for the UK’s data centre market and as we stand on the brink of unprecedented change, we, the UK data centre industry, need to tackle some pressing challenges to ensure our industry delivers on the growth predictions we are seeing.

Regional growth could bridge the digital divide

While the UK boasts over 500 data centres, their concentration in the South East leaves much of the country underserved. This imbalance creates a digital divide, particularly in Scotland and the North. We’ve seen firsthand how regional growth unlocks potential for businesses in these areas. Regional expansion isn’t just a business imperative, it’s a step towards decentralising the UK’s digital economy and driving economic growth across the entire country.

A major challenge to expanding data centre infrastructure is the limited availability of fibre and power connections in many regions. Addressing the diverse needs of businesses across the UK requires data centres to move beyond planning and take steps toward infrastructure growth. To support this effort, it is crucial for the Government to implement robust measures to enhance connectivity and ensure reliable power supplies, paving the way for a more decentralised and inclusive digital economy.

AI is driving demand for high-density computing

AI is still the hottest topic in technology right now and will remain so for the foreseeable future. However, don’t believe all the hyperbole. While AI is driving transformative changes across various industries, the surge in speculative investments in AI-ready data centres may be overestimating immediate demand. This situation could become the dotcom bubble of the data centre industry if lofty investment expectations outpace practical applications. 

There’s no doubt that AI remains a cornerstone of innovation, but the industry must adopt a measured approach to prevent overbuilding infrastructure for speculative use cases. 

In practice, AI’s high-density computing requirements (e.g., 100–150 kW racks) are typically tied to finite modelling periods, lasting weeks or months. This short-term demand stands in stark contrast to the long-term contracts necessary for the commercial success of data centres, demonstrating the need for a more balanced and realistic perspective across the sector.

Will we see a shift back to colocation?

Is ‘cloud-first’ consigned to history? Our recent research highlighted that 91% of businesses are now repatriating workloads to colocation or on-premise data centres. Why? High costs, compliance issues and security concerns associated with public cloud solutions are driving this shift. 

The truth is, many companies now prefer hybrid cloud models, combining public cloud flexibility with the security of private or colocation facilities. This trend presents a huge opportunity for regional data centres to provide tailored, customer-centric solutions. 

There has also been a lack of impartial advice in the industry, leading companies to make ill-informed decisions during their cloud adoption journey, often driven by financial incentives offered by some public cloud providers. We’re hoping for greater transparency moving forward where organisations are better advised by neutral advisors rather than those who stand to gain the most financially.

Sustainability will continue to be a critical priority

The growing debate around the ever increasing amount of data (being generated by both businesses and consumers) cannot ignore the impact that this has on energy consumption and the significant power demands of data centres. At present, the International Energy Agency (IEA) reports that data centres consume 1% of global electricity, a figure set to rise as digital demands increase. However, to put this into context, the manufacturing sector currently accounts for approximately 37% of global electricity consumption.

While sustainability is a significant challenge, the issue goes beyond energy sources. In the UK, power availability has emerged as a critical bottleneck, with new grid connections facing extensive delays of three to five years or more. The long wait only impacts our ability to increase the amount of green energy available on the national grid. The industry must collectively push the UK Government to address these delays and implement measures to support the sector’s expansion. Addressing grid constraints, alongside advancing green energy, efficient designs and stringent sustainability practices, will be crucial to meeting both environmental and regulatory expectations, including the Corporate Sustainability Reporting Directive (CSRD).

Get regulation ready

Talking of regulation, while the recently designated Critical National Infrastructure (CNI) for UK data centres is long overdue, it also brings new responsibilities, especially with upcoming regulations like the Cyber Security and Resilience Bill. These laws will demand enhanced security measures and stricter energy efficiency standards, challenging all of us to meet lower Power Usage Effectiveness (PUE) targets and will place new responsibilities on UK data centres, increasing reporting and compliance burdens. Business and Government need to strike a balance in regulation to ensure it doesn’t deter investment and lead to operational inefficiencies.

UK could lose out to Europe over costs

Competition from our European counterparts is heating up, with countries like Norway offering lower deals than the UK, largely down to much lower energy costs. However, new EU regulations are shaking up the data centre landscape. Tough sustainability mandates are sparking pushback, particularly from operators in Germany and France, who are warning those of us in the UK against adopting similarly restrictive measures that could deter investment.

While each country grapples with its own geopolitical and economic hurdles, many EU nations have capitalised on cheaper energy, advantageous tax regimes and streamlined energy distribution networks enabling operators to deliver cost savings to their customers. For UK data centres, this creates a tough playing field, as businesses increasingly prioritise cost-efficiency alongside proximity and reliability. To stay competitive, UK data centres must drive sustainability, innovation and operational efficiencies while navigating regulatory and energy-related challenges with care.

2025 will be a defining year for data centres

As we told Sarah Montague during her visit, the year ahead presents both challenges and opportunities. By embracing regional expansion, adapting to increasing infrastructure demands and committing to sustainability, the UK data centre industry can secure its place as a global leader in digital infrastructure. Collaboration and innovation will be key as we navigate this pivotal period. If we rise to the occasion, 2025 won’t just be a challenging year – it will be the year that defines the UK as a hub for transformative growth in the digital economy.