Nscale swallows lion's share of UK datacenter investment

ON-PREM

Tracxn credits one AI infrastructure outfit with $3.7B of sector's $5.7B haul

Nscale accounts for nearly two-thirds of the equity funding raised by UK datacenter infrastructure companies, according to a report from Tracxn.

The market research firm identifies the rent-a-GPU operation as the only unicorn – a privately held company valued at more than $1 billion – in Britain's datacenter infrastructure sector.

Nscale leads the pack with $3.7 billion raised, according to Tracxn, out of $5.7 billion across the sector. Other notable players identified by Tracxn include GreenScale, with $1.3 billion; Kao Data, with $177 million; Verne, with $125 million; Iceotope, with $107 million; and Six Degrees Group, with $106 million.

Iceotope is not a datacenter operator but a developer of liquid-cooling systems, hence its inclusion in Tracxn's broader infrastructure category.

Tracxn counts 154 companies in the sector, 24 of which have raised equity funding. It says investment has surged in recent years amid growing demand for AI infrastructure.

Tracxn's report, Datacenter Infrastructure – UK, covers British companies that operate server farms or provide supporting IT infrastructure, such as Iceotope. It excludes businesses focused on datacenter construction or real estate.

Companies based in London attracted 93 percent of the funding tracked by Tracxn, highlighting the sector's geographic concentration.

Tracxn also says that the Brit datacenter infrastructure sector has recorded 36 acquisitions but only two IPOs. TelecityGroup was the largest acquisition, absorbed by US giant Equinix for $3.8 billion.

Reports covering the broader UK datacenter construction market provide a different perspective.

Infrastructure specialist Onnec cites Barbour ABI figures showing nearly 100 UK datacenter projects worth more than £36 billion ($49 billion) in the pipeline. That construction activity includes substantial investment by overseas operators, a market excluded from Tracxn's figures.

US-headquartered operators including Digital Realty, Vantage Data Centers, CyrusOne, and Equinix have a substantial UK presence, alongside cloud giants Amazon Web Services, Microsoft, and Google.

Onnec's research also points to the risk of datacenter infrastructure failing to keep pace with investment in AI hardware.

Its latest survey found that 43 percent of operators had needed infrastructure upgrades or remedial work after facilities went live. The survey covered 300 decision-makers across the UK, Ireland, and the Nordic countries, rather than the UK alone. ®