The Government has officially opened the bidding process for AI Growth Zones across the UK, with the aim of creating thousands of new jobs and boosting the country’s economy.  

AI Growth Zones were announced as part of the UK Government’s bid to unleash the power of AI across the country. They’re expected to be similar to the ‘Freeports’ concept, although rather than facilitating the easier transfer of goods, AI Growth Zones will have relaxed planning rules and access to enough power capacity to encourage the development of AI-ready data centres. 

As part of its commitment to AI Growth Zones, the UK Government is now asking local and regional authorities to put forward proposals to help it decide where these zones should be placed. As part of the deal, the Government is promising a boost to local communities, significant private investment, and the creation of thousands of new jobs – all of which could be attractive to regions all across the UK. 

Driving local regeneration with AI

There are some key requisites for areas bidding to host an AI Growth Zone, as they will need at least 500 MW or more of available power capacity. After all, the availability of power is one of the biggest factors when it comes to developing an AI-ready data centre, and no matter how easy it is to get through the planning process, the lack of power can immediately kill any prospect of building a data centre. 

The Government has already signalled that it’s hoping to revitalise deindustrialised regions by giving them AI Growth Zones. This could help ‘level up’ areas of the UK that are desperate for the thousands of jobs that could be delivered under the policy – that includes areas with high levels of unemployment, such as the North East of England or Scotland, where there’s an abundance of renewable energy capacity. 

Peter Kyle, Secretary of State for Science, Innovation, and Technology, commented, “We set out our new blueprint for AI less than a month ago, and we’re already delivering on that vision by harnessing technology to supercharge our Plan for Change.

“These new AI Growth Zones will deliver untold opportunities – sparking new jobs, fresh investment and ensuring every corner of the country has a real stake in our AI-powered future.

“We’re leaving no stone unturned in how we can harness expertise from all over the UK to deliver new opportunities, fresh growth, better public services and cement our position as an AI pioneer, and that’s the message I will be sending to international partners and AI companies at the AI Action Summit.”

Encouraging nationwide participation

Authorities in Scotland, Wales, and the North of England are already preparing to put sites forward, with a particular emphasis on areas that have existing infrastructure connections, such as nuclear reactors, solar farms, wind power or battery storage. The Government is also calling on energy companies and data centre developers to submit proposals outlining how they could help ramp up local power capacity, form partnerships with local authorities, and support the UK’s wider AI ambitions.

Scotland Office Minister, Kirsty McNeill, noted, “Scotland has always been a leader in innovation, with our rich history of pioneering advancements in fields such as engineering, medicine, and technology, which continues today.

“The UK government’s Plan for Change looks to harness AI’s potential in these industries and unlock new opportunities for innovation and economic growth.

“Scotland is already at the centre of these plans, with our world-leading universities at the forefront of AI development and our industrial heritage providing a range of possible sites. I would encourage our Local Authorities to explore becoming an AI Growth Zone, which will help attract further investment.”

Tees Valley Mayor Ben Houchen commented on the potential for his region, saying,  “It was great to be invited to visit 10 Downing Street last week to talk about the massive potential AI has to bring a huge leap forward in industries across our nation.

“Teesside, Darlington and Hartlepool have always been at the forefront of cutting-edge technology – from the friction match to the railways and the chemical industry.

“My job above everything is to bring good, well-paid, long-term jobs to local people. We have everything we need to host an AI Growth Zone in our region. We have the land, we have the power and we have shown in our efforts at Teesworks how we can get huge projects moving forward at pace.”

UK Government urges the industry to get involved

The government has also urged private firms to share their own plans for AI Growth Zones. Beyond helping to select the sites themselves, the UK Government says that companies will play a key role in shaping policies to ensure the zones are fully equipped to support AI research and deployment.

Spencer Lamb, CCO, Kao Data, which is currently building a £350m data centre in Stockport, commented, “Kao Data has long-recognised the potential of Greater Manchester to become the UK’s next AI and advanced technology hub, and with its position as the UK’s largest economy outside of London, the city region was the perfect place to build-out our next £350m data centre.

“Fundamentally, Greater Manchester has enormous potential to become an AI Growth Zone (AIGZ) – it is home to the largest AI ecosystem in the UK by headcount; it has the largest digital sector outside of the southeast; and boasts a robust tech talent pipeline from a host of world-class universities and research institutions.

“Further, with a vision provided by the Mayor, Andy Burnham and the Greater Manchester Combined Authority’s (GMCA) Digital Blueprint strategy, there is no better location for a new AI Growth Zone. Not only do we strongly support any proposal from the GMCA, but we at Kao Data are delighted to be part of that journey.”

Mark Yeeles, Vice President, Secure Power Division, Schneider Electric UK & Ireland, concluded, “As the government ramps up its Plan for Change, its continued engagement with the digital infrastructure ecosystem will not only be integral to accelerate sustainable, economic growth, but will play a key role in its mission to revitalise local communities by delivering much-anticipated new job opportunities, and identifying new measures reskill the workforce.

“At Schneider Electric we’ve long-seen the significant potential that the Northwest of England, particularly Greater Manchester and Leeds, presents to develop AI Growth Zones (AIGZ) and to further supercharge the AI opportunity. However, we must also recognise that Scotland and Wales are well-placed to catalyse growth via the development of new large-scale infrastructure and renewable energy systems, both of which will be vital.

“What’s clear is that as we move forward, solving the energy, sustainability and security challenges of artificial intelligence remains integral to deliver a greener future, powered by AI, and we look forward to working with both the government and the ecosystem to exceed these ambitions.”

When will the first AI Growth Zone be announced? 

We already know where the first AI Growth Zone is going to be placed, as it was announced last month. It will be located in Culham, Oxfordshire, which has been home to the UK’s Atomic Energy Authority since 1965. 

It wasn’t exactly a surprise to see Culham named as the first AI Growth Zone, after all, it was confirmed that it would play host to AI-ready data centres back in 2024. Additionally the glut of power capacity available following the closure of the Joint European Torus project, meant that the site was a no-brainer for the UK Government’s AI ambitions. 

The Culham site will also serve as a testbed for future AI Growth Zones, where it will test how sustainable energy, including fusion technologies, can meet the power demands of emerging AI innovations. 

As for when the next AI Growth Zones will be announced, well that will depend on the response the Government receives from local authorities and businesses. While expressions of interest are now open, the formal selection process will launch in the spring, with successful applicants being named in the summer. 

Are AI Growth Zones enough to compete with other countries on AI? 

The $500 billion question will be whether the UK Government’s commitment to AI Growth Zones will be enough to compete with other countries on AI. After all, the US has announced the $500 billion Stargate Project, while Alphabet and Microsoft are both planning to splash the cash on AI data centre developments stateside. 

Meanwhile, at an Artificial Intelligence Action Summit in Paris, President Emmanuel Macron has announced €110 billion of private sector investment in the AI space in France. That absolutely dwarfs the £14 billion of investment the UK Government has attracted since announcing its AI Action Plan last month.