Blackstone Invests £10B To Build Europe's 'biggest AI Datacenter' In UK

US investment giant Blackstone is plowing £10 billion ($13.4 billion) into a massive AI datacenter project located in northeast England, British Prime Minister Keir Starmer announced on Wednesday.

The facility, touted as the “biggest AI datacenter” in Europe, is slated for construction near Blyth, Northumberland, at the site of the now defunct BritishVolt battery plant. The project is expected to bring more than 4,000 jobs to the region, 1,200 of which will be related to the construction of the site.

“New investment such as the one we’ve announced with Blackstone today is a huge vote of confidence in the UK and it proves that Britain is back as a major player on the global stage and we’re open for business,” Starmer said in a canned statement.

Alongside the £10 billion to fund the datacenter, Blackstone has also committed to investing £110 million to upskill workers to run the facility and upgrade transportation infrastructure in the region.

However, we expect the bulk of Blackstone’s investment will go to AI accelerators, though it remains to be seen whose chips will power the facility. While Nvidia’s upcoming Blackwell accelerators might seem the natural choice due to the maturity of the GPU giant’s software and hardware ecosystem, Intel and AMD have grown far more competitive in recent generations.

AMD’s Instinct MI300-series accelerators have gained considerable momentum in recent quarters, with the House of Zen forecasting the GPUs will drive $4.5 billion in revenues in 2024. Meanwhile, Intel this week officially launched its Gaudi3 accelerators, which boast performance competitive with Nvidia’s venerable H100s, while undercutting them on price.

Whatever accelerators end up powering the facility, Blackstone will be able to afford a lot of them.

While it might seem strange for a private equity firm to be building datacenters, the business of renting AI infrastructure has become an incredibly lucrative enterprise. As our sibling site The Next Platform previously explored, an investment of about $1.5 billion to build, deploy, and network an AI datacenter today would net you roughly $5.27 billion in revenues within four years. With an investment totaling $13.4 billion, Blackstone should make a killing on the site, if, of course, AI boom doesn't fizzle before it comes online.

Blackstone is also no stranger to these developments. This spring, the investment firm joined BlackRock and others to inject $7.5 billion in debt financing into CoreWeave’s rent-a-GPU racket.

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Whether Blackstone decided to cut out the middleman and launch a GPU cloud of its own or if it’ll tap another firm like CoreWeave to actually run the Blyth site remains to be seen.

Having said that, we can’t help but notice that earlier this year CoreWeave announced a £1 billion project to establish a European headquarters in London and construct a pair of AI datacenters in the UK.

We’ve reached out to Blackstone for comment on the datacenter development; we’ll let you know if we hear anything back. ®