The Office for National Statistics has updated its methodology to report £11.2 billion in UK digital infrastructure investment, reflecting a broader classification of data centers and hardware.

Key Points

• The revised ONS measure includes data center buildings, network software, and radio spectrum, significantly increasing the reported investment total from the previous £3.6 billion figure.
• Despite the expanded definition, actual digital infrastructure investment fell by 4.0% in 2025, a decrease of £0.5 billion compared to the previous year.
• Data centers and software now dominate the sector, accounting for 84% of total investment as businesses scale cloud and AI capabilities.
• Government grants for digital infrastructure reached £0.7 billion in 2024, marking the highest level of public funding recorded in the series since 1995.
• The UK government designated data centers as Critical National Infrastructure in 2024, with 171 construction projects currently in the development pipeline.
• Energy capacity constraints and grid connection delays remain significant barriers to further infrastructure expansion, potentially limiting widespread AI deployment.

Why it Matters

This reclassification highlights the growing economic importance of data centers and AI-ready infrastructure within the UK's national accounts. However, the ONS warns that these figures are currently experimental and should not yet be used to guide formal policy or major investment decisions.