US investment giant Blackstone has committed $13.4 billion investment to construct

Europe’s “largest” AI data center in north-east England. More specifically, the massive facility will be located near Blyth, Northumberland, at the site of the former BritishVolt battery plant. It is expected to generate over 4,000 jobs for the region, including 1,200 jobs related to the construction phase.

The project was announced by British Prime Minister Keir Starmer on Wednesday, last week. “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,” he said.

In addition to the £10 billion earmarked for the datacenter, Blackstone has pledged an additional £110 million to upskill local workers and improve transportation infrastructure around the Blyth site.

The best AI chips

While the specifics of the technology powering the datacenter have not yet been confirmed, industry speculation is rife about which AI accelerators will be used. Nvidia’s Blackwell accelerators, Intel’s Gaudi3, and AMD’s Instinct MI300-series GPUs are all contenders for the project.

Nvidia, with its well-established ecosystem, may be the frontrunner, but Intel and AMD have gained ground in recent years. AMD’s Instinct GPUs, in particular, are forecast to drive $4.5 billion in revenues for the company in 2024, while Intel’s newly launched Gaudi3 chips offer competitive performance at a lower price point.

Regardless of the choice, Blackstone’s substantial investment ensures the datacenter will be equipped with state-of-the-art AI hardware, positioning the facility as a key player in Europe’s AI infrastructure market.

An Increasingly Lucrative Market

Private equity firms like Blackstone have been increasingly drawn to the business of building and renting out AI infrastructure, a market that has become highly profitable. According to industry analysis, a £1.5 billion investment in an AI datacenter could generate approximately £5.27 billion in revenues over four years. That’s almost 5X the initial investment.

With Blackstone’s much larger investment of £10 billion, the firm stands to make significant returns—provided the AI momentum doesn’t slow down.

Earlier this year, Blackstone, BlackRock, and others also came together to provide $7.5 billion in debt financing for CoreWeave, a prominent GPU cloud provider. It wouldn’t be a surprise if Blackstone decides to outsource the management of the facility to CoreWeave. This would greatly help with their compliance to the UK's data sovereignty regulations. Earlier this year, CoreWeave committed £1 billion to establish a European headquarters in London.