As AI drives unprecedented demand for data centres Britain’s construction industry must embrace the revolution or risk being left behind by global competitors, write Hari Vasudevan, founder and CEO of KYRO AI, and Neil Shah, president and CEO of the Construction Financial Management Association
Demand for data centres is booming thanks to AI. More than 100 new facilities are planned across Britain, including a £10bn flagship project led by tech giants like Microsoft and Google.
This surge offers huge opportunities but also exposes weaknesses in Britain’s ageing grid, workforce and manual construction practices. To keep pace, firms must rethink operations and embrace AI across their build and finance functions.
Britain’s ageing grid: A hidden risk to data centre construction
Britain’s power grid is dangerously outdated; approximately one-third of transformers date back to the 1970s, while just over half of all power cables were installed in the same period.
Utility leaders in Britain are increasingly speaking up about these risks. National Grid chief executive John Pettigrew has warned that data hubs now account for more than half of all new requests to connect to the grid, with up to 19GW of additional data centre capacity seeking a connection over the next five years.
Without faster investment in generation and networks, this wave of uncoordinated, energy‑hungry growth risks driving up costs and putting avoidable strain on Britain’s power system.
Unreliable infrastructure and power sources mean that data centre projects can easily come to a screeching halt. Hyperscalers have choices on where to locate their data centres.
If the UK’s electric grid is unreliable, and the construction industry does not step up, there is stiff global competition, including from China, Saudi Arabia and the UAE.
The relentless demands of hyperscale build-outs
Hyperscalers like Google and Amazon don’t have the luxury of time to wait for grid upgrades. These constraints are prompting tech giants to move off the grid and rely on self-contained generation, such as gas turbines, fuel cells or even compact modular nuclear systems, to power operations. Yet this decentralised model often brings significant drawbacks, including rising costs per kilowatt, larger carbon footprints and ongoing concerns over reliability, resilience and efficiency.
While that keeps project opportunities rolling for construction companies, it also puts enormous pressure on them. Hyperscale projects require thousands of highly skilled workers, often in challenging working conditions.
In fact, a recent report published by Microsoft estimates that the construction of these new data centres will call for up to six million work hours. Labour shortages remain among the most critical challenges, with construction reporting the second-highest workforce shortage across all UK sectors.
To add further complexity, these projects are also known to require tens of thousands of tonnes of steel, copper, cement and other materials, in addition to advanced chips. These materials are increasingly difficult to source in the UK thanks to a heavy reliance on complex supply chains.
Moreover, imports are undergoing a massive transformation as the geopolitical trade world evolves with new alliances, treaties and an evolving world order.
So questions remain: How will these projects be financed? Who will be most qualified to build them? Which firm will ultimately win the AI race? And will the UK play a major role in the ultimate success?
AI-enabled construction: Finance and operations
An intrinsic issue has plagued construction for a long time. The sector is notoriously resistant to adopting technology, relying on outdated operations like spreadsheets and manual efforts. Coping with data centre demands and navigating these compounding challenges, while relying on manually intensive project and financial management, is a recipe for disaster.
The industry needs innovation to fortify its level of resilience to keep pace with demand. AI’s role in ensuring timely and informed project management and financial forecasting can no longer be ignored.
Construction firms can remain one step ahead with the predictive capabilities of AI tools. Automation and real-time analytics, combined with expert human oversight, are the cornerstones of the next chapter of the industry’s growth and prosperity. Modernising financial and construction operations is a non-negotiable, with AI systems empowering construction with:
- Strategic digitisation that leverages data more effectively to reduce capital lockup and ensure smooth cash flows, improving the financial performance across project delivery.
- Risk minimisation via real-time analytics on finances, field productivity, safety and logistics. Project managers can use these to uncover potential delays, shortages and failures ahead of time.
- Automatically tracked labour hours, submissions and payment workflows to reduce friction, particularly in large-scale projects.
- Humanised construction where staff are better protected from long shifts and burnout. Algorithms can monitor patterns such as extended shifts, excessive travel, and HSE concerns, allowing managers to proactively adjust workflows and support.
To illustrate the impact, AI-powered analytics can predict transformer overloads or cable failures weeks in advance, enabling preventive maintenance. Real-time labour tracking reduces idle time and improves safety compliance. On a £10bn data centre project, a 2%-3% efficiency gain means £200m-300m in savings or schedule compression. This is the difference between meeting market windows and missing them entirely.
The UK construction industry stands at a crossroads: embrace AI-driven transformation now or risk losing critical infrastructure opportunities to international competitors. The choice isn’t between innovation and tradition but whether the UK leads the data centre revolution or watches its global competitors race ahead.
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