The UK government’s AI Growth Zones strategy: Everything you need to know

What is an AI Growth Zone?

According to the government, AI Growth Zones are designated sites that are well-suited to housing AI-enabled datacentres and their supporting infrastructure. Ideally, these zones should have “enhanced access” to power supplies of at least 500MW and sympathetic planning support. This is because datacentres are notoriously power-hungry entities, and siting them in areas where energy is in short-supply could slow down the time it takes to bring one of these new AI server farms online. 

This is also why the government is prioritising areas where it is possible to fast-track the process of securing planning permission for a new datacentres, because there are numerous examples of similar projects being kicked into the long grass because of planning issues.

To address both these points, the government has said it’s looking to build AI Growth Zones in de-industrialised parts of the country that can be readily redeveloped to speed up the time it takes to bring them online.

Has the government done anything else to fast-track the development of datacentres?

It is assumed the government’s decision to prioritise applications for AI Growth Zones in existing de-industrialised areas is because it will make it easier for datacentre developers to get sign-off for their projects because these areas have previously undergone development.

However, in addition to that, the government – since coming to power in July 2024 – has made a concerted effort to lower the planning barriers to datacentre developments in other ways.

This began with the launch of a consultation in July 2024, led by the Ministry of Housing, Communities and Local Government, seeking views on how to make immediate changes to the National Planning Policy Framework to fast-track the development of large-scale infrastructure developments, such as datacentres.

The government also vowed that planning decisions about large-scale infrastructure projects will be taken nationally, rather than locally. This has already resulted in deputy prime minister Angela Rayner reviewing decisions to block the builds of two datacentres because allowing them to proceed is in the interests of the national economy.

Are there any AI Growth Zones in operation yet?

The government confirmed in its January 2025 AI opportunities action plan paper that the location of the first pilot AI Growth Zone had already been decided on, and would be located in Culham, Oxfordshire, at the headquarters of the UK Atomic Energy Authority (UKAEA).

“The government and UKAEA will seek a private sector partner who would develop one of the UK’s largest AI datacentres, beginning with 100MW of capacity and with plans to scale up to 500MW,” the document stated. “The pilot would pioneer innovative public-private models to deliver secure, dedicated public sector computing capacity, supporting key national priorities.”

It is also understood the site will be used as a testing ground for research into sustainable energy sources, as part of the government’s commitment to powering its AI ambitions with green energy.

How does the government decide where to build AI Growth Zones?

A month after the AI opportunities action plan dropped, the government announced in February 2025 that it was inviting local and regional authorities across the country to submit bids for their areas to become home to AI Growth Zones.

Secretary of state for science, innovation and technology Peter Kyle said at the time: “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.”

The government has also indicated that it is particularly interested in AI Growth Zone proposals that could bring at least 500MW AI compute capacity online by 2030.

How much interest has the government had from local authorities wanting to house AI Growth Zones?

In April 2025, the government confirmed that 200 local authorities across the UK had expressed an interest in their areas becoming AI Growth Zones, and that it would begin progressing some of these bids by the end of that month. The idea being that councils that have submitted successful bids will be notified sometime in the summer of 2025.

What areas are vying to become AI Growth Zones?

The government claimed in February 2025 that it had received interest from site owners in Scotland, Wales, the North East and North West of England about the possibility of creating an AI Growth Zone in these regions.

Since then, details about specific areas that want to be in the running to become AI Growth Zones have started to emerge, with North Lincolnshire Council known to have thrown its hat into the ring.

The council claims becoming an AI Growth Zone would attract £15bn in private business investment to the area, and create 1.5 gigawatts of AI processing capacity, with plans to build four AI-enabled datacentres in the region.

The City of Doncaster Council has also applied for consideration for the city to become an AI Growth Zone, as part of a broader push by the local authority to establish a Centre of Excellence for AI in the region.

Another bid is also known to have been submitted as part of a collaboration, including The University of York and North Yorkshire Council, as well as other private sector entities.