LONDON, Oct 22 (Reuters) - Spending on new UK data

centres is set to rise to 10 billion pounds a year by 2029, a

more than five-fold increase from 2024, analysis by construction

data firm Barbour ABI has found.

A total of 1.75 billion pounds was spent on data centres in

the UK last year, with 2.38 billion forecast to be spent in

2025.

AI-driven demand is fuelling data centre investment. Tech

giants are seen investing 25 billion pounds into the UK over the

next five years, Barbour ABI found, and almost 100 new data

centre projects are planned.

Growth is being supported by government initiatives such as

AI Growth Zones which aim to streamline the planning process for

new digital infrastructure.

London and surrounding areas have traditionally dominated

the data centre sector, but development is increasingly

expanding nationwide, according to Barbour ABI.

The largest planned UK data centre project is a $13 billion

"hyperscale" data centre in North East England, proposed by U.S.

private equity group Blackstone.

Last month, Britain and the United States agreed a

technology pact with top U.S. firms including Microsoft ( MSFT ), Nvidia ( NVDA )

and Google, among those pledging investments in the UK.

Global data centre demand and planned projects have surged

since ChatGPT was released in late 2022, as big money and

governments bet generative AI will revolutionise the way we work

and live.