Key facts
- Global investment in GPUs and AI chip infrastructure has surpassed $1 trillion since 2023.
- High-end GPUs can cost between $20,000 and $30,000 and consume approximately one kilowatt of power.
- Power availability is a significant constraint for data center investment.
- Scandinavia is emerging as a key region for data center development due to renewable energy access.
- Tritax Big Box plans to raise £350m for two new London data center projects.
City lawyers have identified the financing of Graphics Processing Units (GPUs) as a significant trend within the booming data center market, driven by the escalating demand for artificial intelligence capabilities. Since the generative AI surge began in 2023, global investment in GPUs and related AI chip infrastructure has reportedly exceeded $1 trillion.
Partners at Clifford Chance, Emma Matebalavu and Matt Dunn, stated that GPU financing is currently a major focus. They noted that individual high-end GPUs can cost between $20,000 and $30,000 and consume substantial power, nearly matching the cost of the data center buildings themselves.
While investment in data centers is expanding beyond construction to include power, planning, and technology risks, stabilized sites with grid connections and planning permission are attracting capital from sources like pension funds and insurers. These can then be refinanced through rated capital markets deals.
Tritax Big Box, a FTSE 100 real estate investor, announced plans in August to raise £350 million through a new share issue to fund two London data center projects, expected to be completed by 2031.
Despite increased interest and activity, power availability remains a critical constraint for data center expansion, prompting a rise in interest in jurisdictions with robust grid access. Lawyers observed that the European market is growing beyond traditional hubs like Frankfurt, London, Amsterdam, Paris, and Dublin (FLAP-D) to include cities such as Milan, Madrid, and locations in Scandinavia.
Scandinavia, in particular, is highlighted for its abundant renewable energy sources, including hydroelectric power in Norway and wind and nuclear power in Finland, making it an attractive region for data center development. This comes as the UK's demand connection queue for grid access has surged, with Prime Minister Andy Burnham unveiling Great British Grid to accelerate business connections and address delays that are hindering growth.