Updated version 2 - Drax collaborates with Brookfield to build a $27 billion AI data center in the UK

The full article supplements analyst commentary, share price, and background information.

Reuters, November 3 - UK power company Drax DRX.L has partnered with Brookfield BAM.N and artificial intelligence infrastructure platform Radiant to develop a data centre with a capacity of over 1 gigawatt at its power plant in northern England. The project is expected to attract over £20 billion ($26.8 billion) in investment.

Drax shares soared 9% in early Tuesday trading.

The project comes as the UK moves to accelerate the construction of data centres of strategic importance (link) by prioritising grid connections and planning support, aiming to enhance AI processing capacity and keep sensitive data within the country.

"If fully built, the project could become one of the largest data centres in the UK," said Drax Group CEO Will Gardiner.

JPMorgan analysts pointed out that this announcement could increase market valuations of Drax's data centre development plans and strengthen expectations that the Drax power station may continue to operate after its subsidy plan expires in March 2031.

They added that, given Brookfield's credibility as a partner, investors should view its involvement positively.

Home-based computing

Drax said Brookfield estimates the total investment could exceed £20 billion, including an initial £2.5 billion for the first phase.

Drax will provide land, power, and grid connection services via its 4-gigawatt grid-connected facility at the Drax power station. Radiant will contribute AI infrastructure expertise, while Brookfield will provide funding through a joint venture with Qatar's Qai, announced in 2025.

The first phase will draw power directly from the grid and aims to start commercial operation in early 2028, pending planning, regulatory, and grid approvals, as well as final investment decisions from the partners.

The partners stated that the project will also set up a voluntary community benefit fund in cooperation with the local community, independent of planning obligations and Drax's existing projects.

(1 USD = 0.7460 GBP)

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