UK digital infrastructure investment has almost doubled in five years, rising from £6.3 billion in 2019 to about £11.6 billion in 2024, according to revised figures from the Office for National Statistics (ONS), even as economists remain sceptical about whether artificial intelligence is yet driving real productivity gains.
The ONS revised its methodology for calculating digital infrastructure spending to bring the UK in line with standards used in other major economies. The new approach encompasses data centres, software to run IT, cables and other digital infrastructure. ONS officials said they could not pull out exact figures for data centre investment alone because of how assets are grouped, but suggested the broader rise in spending reflected the ‘growing importance’ of those facilities.
Buildings, software and databases accounted for about 77.6 per cent of digital infrastructure investment between 2020 and 2025. In 2025, the group of assets that includes data centres and fibre optic cables is estimated to have reached £5.6 billion, up around 94 per cent since the start of the pandemic.
UK digital infrastructure investment backed by a deepening data centre pipeline
The scale of planned construction underlines how much further spending could go. The ONS noted that around 171 data centre construction projects tracked by Barbour ABI could quadruple current investment levels by 2030.
Separate data reported by Reuters paints an even sharper trajectory. £1.75 billion was spent on UK data centres last year, with £2.38 billion forecast for 2025. By 2029, annual spending is projected to reach £10 billion, a more than five-fold increase from 2024 levels. Tech giants are seen committing £25 billion into the UK over the next five years, with almost 100 new data centre projects already in planning, according to Reuters.
The BBC has reported that there are currently an estimated 477 data centres in the UK, giving some sense of the base from which this expansion is being launched.
The ONS revised its calculations partly to better track AI-related investment. Its statisticians highlighted business surveys suggesting that more than a third of businesses with ten or more employees were adopting AI in 2026, a trend it said was helping to push digital infrastructure spending higher.
Productivity debate: AI adoption not yet matching the growth in UK digital infrastructure investment
Despite the surge in capital spending, leading economists are not yet ready to credit AI with the productivity gains that have appeared in recent data. Analysts at the Resolution Foundation, Morgan Stanley and the London School of Economics have separately argued that the UK is enjoying a productivity ‘boom’, but the reasons for it remain contested.
The Resolution Foundation said that, based on payroll data rather than the ONS’s labour force survey measure, productivity has been expanding by 1.1 per cent a year since late 2024, against an ONS estimate of 0.2 per cent. Morgan Stanley researchers said private sector productivity in the second quarter of the year was running at 1.8 per cent over a 12-month period.
Yet the consultancy Pantheon Macroeconomics warned clients there was ‘little evidence’ to suggest AI was making workers produce more output per hour. Economists Rob Wood and Elliott Jordan-Doak at Pantheon said that while AI adoption surveys were trending upward, the same data showed AI was not translating into ‘material headcount reductions’.
‘The bulk of businesses in [a Bank of England survey] say AI has had “no material impact” on headcount over the past three years, while the proportion of firms in the Business Insights and Conditions survey cutting jobs because of AI remains low and stable,’ the Pantheon note said. ‘We also see little relationship between AI adoption and either vacancies or payrolled employment. The equivocal results on vacancies and jobs likely reflect in part increased use of AI boosting the demand for some workers, as well as replacing some jobs.’
Wood and Jordan-Doak said they believed ‘big changes are afoot beneath the surface’ for some workers, though they cautioned that recent productivity gains ‘may not yet be the start of a sustained trend.’ With the data centre pipeline expanding rapidly and AI adoption still broadening, the ONS has said it will continue refining how it measures digital investment.
