Bruce Owen, President EMEA and Interim Managing Director UK, Equinix, offers his thoughts on what’s in store for the data centre industry in 2025.
1: Data centres will power economic growth and stability in the UK
There is already a growing recognition of the role data centres play in powering wider economic growth, as evidenced by their designation by the UK government as Critical National Infrastructure (CNI) alongside energy and water systems. Following this news, several tech providers have already announced major new UK investments, a trend that will ramp up and continue throughout 2025, helping to stabilise the economy.
The Smart Centres Index announced that London remains the tech capital of the world, due in large part to the Government’s renewed focus on funding UK data centres to meet the rising demand for AI and machine learning (ML).
Currently, data traffic in the London metro area is growing at a Compound Annual Growth Rate of 32%, a figure that is likely to rise throughout 2025. In this context, data centres will be essential for the UK to demonstrate its capacity to scale infrastructure and support the growth of the digital economy to meet future demands.
2: AI will turbo charge the requirement for faster, smarter and more efficient data centres
Looking ahead, data centres will have the same long-term economic importance and impact that coal fields, railway networks and power generation had during the Industrial Revolution. Poised to become a future community staple, on par with critical infrastructure like hospitals and utilities, data centres will increasingly be central to regional strategic planning. They will incorporate innovative solutions, such as heat recovery and export systems, to repurpose excess heat generated by servers for local heating projects and sustainable initiatives.
Demand for AI will accelerate the trend of two streams of data centres for differing workloads. Locations already have to take into account the availability of sufficient grid power, but increasingly the focus will be on adoption of renewable energy – but this is not always possible.
Latency-tolerant operations focused on activities like AI training and long-term data storage can be located further from cities as requests on these systems are less time-sensitive. They can also be situated closer to renewable power generation and more affordable real estate. While low-latency facilities, critical for real-time transactional processing, will need to be located close to the financial heart of major cities to support applications critical to societies success and functioning.
3: Data centres will drive the economic impact of AI through solving challenges and attracting significant investment for transformative applications like drug development
In 2025, as businesses scale up their use of AI, data centres will be tasked with solving AI-related challenges, such as handling a surge in demand for faster processing, higher storage capacity, and ultra-reliable connectivity to support the growing complexity and volume of data-driven operations. So far, AI has generated investor wealth but limited economic impact due to slow adoption and weak capital investment by businesses. This should begin to shift in 2025.
Over $1 trillion has been invested in AI-focused data centres, despite low adoption and unclear business use cases. This investment is predicated on the transformative potential for ‘agentic’ AI systems in areas such as drug development where it could accelerate preclinical research and overcome high R&D costs to reshape the pharmaceutical industry. Already there are 65 drugs in AI-supported trials.
4: AI will usher in an era of increased infrastructure innovation, and push companies further on their sustainability goals
With rising sustainability regulations and concerns, it’s increasingly crucial for businesses to adopt new, advanced technologies in a manner that minimises environmental impact.
Equinix has already reached its goal of achieving 100% renewable energy coverage in EMEA. Across 2025, to support growing demand from AI and ML, data centre operators will continue to invest in renewable power sources, such as wind, solar, hydrogen, and we will see the conversations around small modular nuclear reactors (SMRs) ramp up in 2025. Energy storage and microgrid operations will be critical to ease pressure on grid infrastructure and provide flexibility to grid operators, particularly in those countries with aging grid infrastructure. Already we are seeing solar and grid storage growing faster than predicted, potentially signaling a peak in global emissions.
The next-generation GPU chips and other AI critical components will see innovations to reduce energy consumption. The innovations include liquid cooling, which will provide an improved method for cooling high density deployments and supporting the next wave of digital infrastructure. And, as Bill Gates has prophesied, the issue of the power consumption of AI could well be solved by the innovations that AI will itself enable.
In the coming years, we can expect hyperscalers in the data centre sector to increasingly invest in SMRs as a solution to meet the growing energy demands of AI. The reliability and low-carbon nature of nuclear power make it an attractive option for hyperscalers, who require a steady power supply for their data centres. Partnerships and projects focused on small modular reactors will likely gain momentum, with hyperscalers aiming to deploy significant capacity by 2035. While concerns about nuclear safety and SMRs persist, the need for reliable and sustainable energy sources will drive hyperscalers to prioritise SMR solutions as a key component of their energy strategies.
5: Data sovereignty will continue to be a priority for governments
Data sovereignty has become critical for UK enterprises, particularly in regulated sectors. As AI becomes integral to business operations, maintaining data sovereignty will be vital for compliance and security as companies deal with increasingly stringent regulations about where and how data is stored, moved and used.
Data sovereignty can be addressed by distributed computing at the Edge, a technique increasingly relied upon to allow businesses and governments to process data closer to the source, achieving faster response times and improved data security. Edge computing services ensure shorter distances for data to travel, delivering benefits such as low latency and high bandwidth, plus more control over data sovereignty and handling.
Concluding thoughts
The internet and its underlying digital infrastructure have become essential components of our daily lives, comparable to the indispensability of water, gas, and electricity. It is now a service that people worldwide rely on and cannot imagine living without.
Overall, 2024 has seen a massive shift in knowledge and opinion from communities and governments towards the value data centers play – in September 2024 we saw the UK Government recognise the critical nature of data centres and digital infrastructure to the economy and society by including them in their categorisation for critical national infrastructure. But this is just the beginning and I urge more governments, societies and industries right across EMEA to engage with the data centre sector more as a whole – to understand further the value that it brings to them – and the work that is being done, often behind the scenes, to ensure that digital infrastructure growth is being done in a way that protects the wider society and the environment for future generations, as well as our own.
