Market Overview

The  UK data center market  was valued at USD 7,459.39 Million in 2025 and is projected to reach USD 12,237.47 Million by 2034. It is expected to grow at a CAGR of 5.65% during the forecast period of 2026-2034. Growth is driven by accelerating digital transformation, widespread cloud adoption, AI deployment, and increasing demand for real-time data processing infrastructure.

Study Assumption Years

  • Base Year: 2025
  • Historical Year/Period: 2020-2025
  • Forecast Year/Period: 2026-2034

United Kingdom Data Center Market Key Takeaways

  • The UK data center market size was valued at USD 7,459.39 Million in 2025.
  • The CAGR is 5.65% for the period 2026-2034.
  • The forecast period extends from 2026 to 2034.
  • By Component, the Solution segment dominated with a 71% share in 2025, driven by demand for integrated infrastructure and advanced software.
  • Hyperscale types led with 45% market share in 2025, benefiting from strong cloud and AI workload investments.
  • Large enterprises represent 68% of the market in 2025, reflecting high digital transformation spending.
  • The IT and Telecom end user segment held 38% market share in 2025, supported by network modernization and cloud service expansion.

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Market Growth Factors

Driving the demand within the UK data center industry are the accelerating digital transformation initiatives․ There is a greater adoption of digital transformation programs by organizations that look beyond technology adoption to transform business processes and empower employees with advanced capabilities․ Permanent remote work and hybrid work also require more infrastructure․ Financial services, healthcare and retail and manufacturing have implemented complex platforms that are supported by scalable data processing environments․ For example, in December 2025, Google Cloud opened its Waltham Cross data center in Hertfordshire to provide high-performance cloud infrastructure for enterprise AI workloads․

Government policy recognizing data centres as critical national infrastructure contributed to market growth․ In September 2025, the UK government designated data centres as critical national infrastructure, with a view to increased regulatory support, faster planning applications and coordinated emergency response in a crisis․ Creating investor confidence reduces the time to build a facility․ Digitalization in the public sector creates demand from governments for secure, regulated data centres․ Investment in infrastructure and regional development reduce reliance on central metropolitan areas and promote a national and geographic spread․

The growth of AI, ML, and advanced analytics tools is creating meaningful demand for new kinds of compute infrastructure․ Companies rely on complex ML algorithms that require important compute capabilities to build, infer from, and continually improve models․ In November 2025 Nebius launched the UK's first GPU cluster at Ark Data Centres' Longcross Park, consisting of 4000 Nvidia HGX B300 GPUs, supporting AI workloads that require purpose-built facilities with higher power densities and advanced cooling․ Also connected to the cluster are a growing number of internet of things devices, creating additional processing requirements, and edge computing for latency-sensitive workloads․

Market Segmentation

  • By Component:
  • Solution: Dominates with a 71% share in 2025, driven by demand for unified data management, integrated infrastructure, and advanced software solutions. Equinix’s £3.9 billion investment in a 250+ MW AI-ready data centre in Hertfordshire exemplifies this trend.
  • By Type:
  • Hyperscale: Leads with a 45% market share in 2025, fueled by strong cloud investments and AI workload demands. Colt DCS’s £2.5 billion investment in West London’s Hayes campus with three hyperscale centres highlights ongoing expansion.
  • By Enterprise Size:
  • Large Enterprises: Account for 68% of the market in 2025, driven by extensive digital infrastructure needs and large IT budgets. Pulsant’s acquisition of SCC data centres in 2025 expanded its platformEDGE offerings.
  • By End User:
  • IT and Telecom: Dominates with a 38% share in 2025, supported by network modernization, next-generation connectivity rollouts, and expanding cloud services. This sector prioritizes superior connectivity and network diversity.

Regional Insights

London is the dominant data center hub in the UK, holding the largest market share due to its unmatched connectivity, proximity to major financial institutions, and extensive internet exchange points. Telehouse's £275 million West Two data centre, under construction in London Docklands since October 2025, supports AI and high-density workloads with renewable energy and BREEAM Excellent certification. The South East region serves as a key expansion zone for overflow demand. Other regions such as the North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, and East Midlands provide diverse growth opportunities driven by connectivity, cost advantages, renewable energy access, and skilled workforces.

Recent Developments & News

In September 2025, Vantage Data Centers opened its second London campus, LHR2, in Park Royal, adding 20MW of IT capacity. The facility incorporates one of Europe's largest public art installations during the London Design Festival and is certified with sustainable BREEAM Excellent systems. This development supports the UK's expanding digital and hyperscale infrastructure needs, highlighting a blend of innovation, environmental stewardship, and capacity growth.

Key Players

  • Equinix
  • BT
  • Colt DCS
  • Pulsating
  • Nebius
  • Vantage Data Centers

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