Google is rumoured to be eyeing up a giant new AI data centre at the Teeswork development site in North East England – although the deal is far from guaranteed.
Back in August, it was reported that there were rival proposals for a single site in Redcar, with the local council backing construction of an AI data centre, while BP was pushing forward with plans to build a blue-hydrogen plant. That single site was Teesworks, a former steelworks described as Europe’s largest brownfield site, and the saga has become even more complicated.
It’s now being reported that Google is interested in occupying the data centre that is planned for the site, with sources close to discussions between Google and Teesworks, led by Tees Valley mayor Lord (Ben) Houchen, noting that talks are ‘finely poised’, with the potential of a final deal signed before Christmas.
While it’s still possible that the deal could fall through, the site could still play host to multiple data centres with or without Google’s backing – especially as the Government has designated it as an AI Growth Zone. That could all be in jeopardy, however, with BP hoping to take up the majority of the site with what could be one of the UK’s largest hydrogen production facilities.
The battle has been brewing for some time between the site’s owners, the local council and BP, but now it’s reported that there’s a wider rift at the centre of Government. Prime Minister Keir Starmer and the new Business Secretary, Peter Kyle, are said to be backing multiple data centres at Teesworks, while Energy Secretary Ed Miliband is instead supporting BP’s proposal.
Speaking to the Sunday Times, which first reported on the discussions between Google and Teesworks, one local businessman dealing with Tees Valley Combined Authority said, “The talks with Google have caught everyone by surprise.”
“BP were being held up by Ben Houchen as the answer to investment on Teesside, and it looks like they’ve been dumped as soon as a better option came along.”
Despite the battle, BP maintains its commitment for the site, with it currently seeking a development consent order for its H2Teesside scheme. If it is denied in favour of the construction of AI data centres, it’s possible the company could seek a judicial review of the Government’s decision – potentially delaying any construction on the site. That lingering threat could also ultimately scupper any deal with Google.
Any delays to the construction also risks the UK falling behind other nations which are equally clamouring for AI-fuelled investment. Although Google has separately announced plans to invest £5 billion in AI infrastructure across the UK, which includes the $1 billion data centre that the company will officially open today in Waltham Cross, Hertfordshire.
