Brookfield Asset Management is targeting a data center exceeding one gigawatt of capacity at the Drax Power Station estate in North Yorkshire, England, in a project the firm estimates could require total investment of more than £20 billion ($26.8 billion) including semiconductors.
Energy company Drax Group announced Tuesday it had signed an agreement with Brookfield and the asset manager's neocloud platform Radiant to jointly develop the facility. London-listed shares of Drax rose 8.8% in early morning trading on the news.
The project is structured in phases. The first targets up to 100 megawatts of capacity to be operational by the first quarter of 2028, with an additional 500 MW planned between 2028 and 2031. A longer-term goal of more than one gigawatt at the site has not been assigned a specific completion date. The initial phase carries an estimated £2.5 billion investment.
"This is a unique opportunity for the UK's AI ecosystem to build at scale," Radiant CEO Mahdi Yahya said in a statement. "By designing, building and operating from the UK, it will give British researchers, startups and enterprises access to frontier compute at home."
The first phase will draw power from the national grid and target commercial customers beginning in early 2028. Drax noted that the initial phase remains subject to planning, regulatory, and network approvals, and that a commercial tenant has yet to be secured. Final investment decisions have not been made, the company said.
The announcement arrives as Europe struggles to match the pace of AI infrastructure development in the United States. The United Kingdom in particular has faced persistent obstacles, including elevated energy costs and lengthy waits for grid connection. In October, Microsoft pulled out of a deal to anchor an Nscale data center near London, citing delays in connecting to the power grid.
The broader financing picture for AI infrastructure drew sharp commentary Tuesday from senior figures in global finance. Speaking at the Hong Kong Monetary Authority's Global Financial Leaders' Investment Summit, Blackstone President Jon Gray said the scale of capital required for AI is generating concentration risks for lenders across both the sector and individual companies.
"There's going to be more equity needed across this space to keep up with these enormous demands," Gray said.
Pimco CEO Emmanuel Roman, appearing on the same panel, warned that the volume of AI financing could prove difficult for markets to absorb. He cited General Atlantic CEO Bill Ford's estimate of roughly $10 trillion in AI-related capital expenditure over the next five years, and noted that approximately $550 billion in AI debt had already been issued in various forms so far this year. For context, the global corporate bond market stands at roughly $20 trillion, Roman said.
Goldman Sachs, in a report published Monday, estimated global data center demand alone would require about $8.5 trillion in capital spending over the next five years.
Despite the warnings, Gray expressed confidence in underlying demand, saying spending on AI models across Blackstone's portfolio companies had risen 20-fold over the past year, driven by applications in coding, customer engagement, and content creation. He said demand for computing power was "running well ahead of supply," even as securing sites, permits, chips, power, and capital grows more difficult.
The Brookfield announcement, combined with the cautionary notes from Gray and Roman, underscores the tension defining the current phase of AI infrastructure expansion: demand is clear, but the financing and logistics required to meet it at scale remain unresolved — a dynamic that will determine the pace of buildout across Europe and beyond.
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