Wales chosen for AI Growth Zone

Wales is set to secure millions of pounds in investment as the future location of at least one AI Growth Zone. The UK government states that Wales has “a trove of potential sites” for this initiative.

AI Growth Zones form part of the UK government’s strategy to scale AI infrastructure, reinforcing its ambition to become a world-leading AI economy and drive growth.

But what exactly is an AI Growth Zone? What is the opportunity for Wales? And crucially, what are the planning and other requirements?

What is an AI Growth Zone?

AI Growth Zones are designated regions backed by the UK government to accelerate the roll-out of data centre campuses and their supply chains.

These zones are central to the UK government’s strategy to foster innovation, create high-skilled jobs and strengthen the UK’s position as a global AI leader by making it easier for private investors and AI companies to develop the necessary infrastructure.

Digital infrastructure growth in Wales

Wales has, in recent years, positioned itself as a dynamic hub for technology innovation. When it comes to data centres, Wales offers a rare combination of space, connectivity and sustainability. The growth of AI and digital infrastructure means Wales will be a key contributor to the UK’s ambition to become a world-leading AI economy.

In addition to the economic benefits, Wales’s natural resources and topography presents a unique opportunity to develop AI Growth Zones alongside renewable and sustainable energy, making a significant contribution to ambitious net zero targets.

Wales has already seen significant data centre investment in recent years:

• Microsoft is investing £2.5bn to build three next-generation AI-enabled data centres in the UK, including one in Newport
• Vantage Data Centres operates Europe’s largest hyperscale data centre in Newport and is developing a 10-centre campus on the former Ford engine plant site in Bridgend
• Latos, a British firm, plans to build a 90MW AI-enabled data centre in Cardiff as part of a broader UK-wide rollout of 40 centres by 2030.

This presents an exciting opportunity for Wales to further grow its thriving technology industry, generate thousands of jobs across construction, operation and AI services, and benefit from proximity to connectivity.

Welsh secretary, Jo Stevens, said: “Wales is already home to a thriving and growing tech industry and this investment in at least one AI Growth Zone for Wales is a vote of confidence in the Welsh economy and testament to the skills and potential of our workforce… This is another significant step forward in our central mission to kickstart economic growth, create well-paid jobs and unlock opportunity in the industries of the future.”

How to secure an AI Growth Zone

To secure an AI Growth Zone, several criteria must be met.

1. Planning: proposed sites must either have existing planning permission or a robust and deliverable plan to secure full planning consent by 2028. While the AI Growth Zone strategy is UK-wide, planning and environmental consenting is devolved in Wales, meaning the Welsh government is key to shaping delivery. Allocation as an AI Growth Zone will not result in blanket planning consent for certain types of development; Planning permission will still be required under the planning regime in Wales, with promoters demonstrating credible planning pathways by 2028, with clear evidence on plan status, pre-app engagement, timetables for obtaining permission and mitigation measures.
2. Power availability: sites must demonstrate access to at least 500MW of power capacity by 2030.
3. Water availability and discharge: sites must show sufficient access to water to support at least 500MW of AI infrastructure.
4. Land availability: sites must have a minimum of 100 acres of land available for infrastructure construction by 2028.
5. Connectivity: sites with strong, reliable and readily available digital connectivity will be viewed favourably.

Feasibility of delivery will also be carefully examined, with a focus on local support, regional power impact and the execution approach of the delivery team.

This announcement places Wales at the forefront of the UK government’s initiatives in this sector. Alongside the Welsh government’s ongoing commitment to AI development, it highlights Wales’s rapid emergence as a vibrant hub for technological innovation and economic growth.

This is an exciting opportunity for Wales to be a leader in the AI and digital infrastructure sector – but to capitalise on this opportunity, all associated infrastructure must be delivered to support growth. It’s no secret that there are significant power and water capacity concerns across Wales and the UK.

At HCR Law, we are trusted advisors in the data centre and digital infrastructure sector. From planning and environmental law, to grid, land and data governance, our team helps clients deliver complex projects with confidence. As Wales prepares for its first AI Growth Zone, we stand ready to guide investors, developers and public bodies through the legal and regulatory landscape across Wales and UK.