The UK government has reportedly selected the former steelworks site at Teesside, near Middlesbrough, as the location for its second AI Growth Zone—part of a national effort to position Britain at the forefront of artificial intelligence infrastructure. Teesworks Ltd, the public-private partnership overseeing the site’s redevelopment, has submitted planning permission for a vast data centre spanning nearly 500,000 square metres, which could become Europe’s largest.
The Department for Science, Innovation and Technology has been in discussions with a major, unnamed investor and has held talks with leading tech firms including Anthropic, DeepMind, Microsoft and Google. The Teesside development is part of the UK’s AI Opportunities Action Plan, which outlines five Growth Zones to support AI infrastructure, each designed to handle at least 500MW of power by 2030. At least one site is expected to exceed 1GW capacity, potentially tripling the UK’s current data centre footprint.
Teesside joins the previously confirmed AI Growth Zone in Culham, Oxfordshire, home to the UK Atomic Energy Authority. Other regions have submitted bids, including areas in Scotland such as Glasgow, Irvine and Dumfries and Galloway, as well as Doncaster, York, Manchester and North Lincolnshire—illustrating the nationwide appetite for high-tech investment and job creation.
However, the Teesside plan has sparked tensions within government. The site is also being eyed by BP for a proposed blue hydrogen and carbon capture facility. A decision from Energy Secretary Ed Miliband is expected by late August. The high energy and water demands of the proposed data centre have raised concerns about compatibility with the government’s net-zero goals, underscoring the challenge of balancing industrial growth with climate targets.
Sources suggest that AI infrastructure development could have advanced more quickly without the constraints of current environmental policies, highlighting a complex policy landscape. Each AI Growth Zone will require enhanced electricity access, with the government planning to allocate up to 500MW of power per site to support data centre operations.
This latest move reflects the UK’s ambition to modernise disused industrial land while building the foundations for a competitive AI economy. With streamlined planning and targeted investment, the AI Growth Zones are set to drive infrastructure development and local regeneration. Yet, the Teesside project will test the government’s ability to reconcile its AI ambitions with climate commitments—two pillars central to the UK’s future industrial strategy.
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