As AI drives demand for larger data centres, lenders are increasingly financing the costly Graphics Processing Units (GPUs) inside them, which can cost almost as much as the buildings themselves.
Data suggests that since the generative AI boom took off in 2023, global investment in GPUs and AI chip infrastructure has been staggering, with figures indicating it has exceeded $1 trillion (£755bn). Last September, it was reported that Nvidia invested up to £11bn in Britain’s AI ecosystem, a move that would see the UK host Europe’s largest GPU cluster by the end of this year.
GPUs are specialised chips that power AI computing by processing vast amounts of data simultaneously, making them expensive due to high demand, complex manufacturing and limited supply.
Magic circle law firm Clifford Chance partners Emma Matebalavu and Matt Dunn told City AM that GPU financing is “the big trend” at the moment. A single high-end GPU can run between $20,000 and $30,000 and consume around a kilowatt of power.
European data centres race for power
While data-centre investment has expanded beyond the initial building, power, planning and technology risks all remain significant factors for investors.
Matebalavu and Dunn explained that stabilised sites with grid-connection, planning permission and even long-term tenants are attracting different sources of capital, such as pension funds and insurers, and can be refinanced through rated capital-markets deals.
In August, FTSE 100 real estate investor Tritax Big Box revealed plans to raise £350m through a new share issue to pump into the construction of London data centres. The money will finance two new data centre projects, set for completion by 2031, that will provide computational capacity to London.
Despite increased work and interest, power availability remains a major constraint on data centre investment, with other jurisdictions rising because of their grid access.
The lawyers noted that the European market is expanding beyond traditional hubs. Matebalavu said Frankfurt, London, Amsterdam, Paris and Dublin (known as FLAP-D) remain important, but Milan, Madrid and Scandinavia have attracted more activity lately.
“The area that’s probably most buoyant and most talked about at the moment in Europe is Scandinavia,” Matebalavu said. Dunn explained: “You have renewable power, like hydroelectric power in Norway, wind and nuclear power in Finland.”
This comes as Prime Minister Andy Burnham unveiled Great British Grid last month, a publicly owned arm of Great British Energy that will aim to challenge existing network operators and speed up connections for businesses.
Britain’s demand connection queue jumped from 41GW in November 2024 to 125GW by June 2025, according to Ofgem. Burnham said grid delays were “dragging growth down”, as the shake-up was expected to significantly affect Britain’s booming data centre industry.