UK considering forcing data centers to invest in local communities as part of AI “covenant” — and it shows getting angry at developers can massively benefit working people

• October 28, 2026

• Data center developers could be required to invest in local communities as part of new UK government plans for an AI “covenant”
• This could come in the form of payments to residents or investment plans for local infrastructure
• Multiple sites in AI Growth Zones have seen widespread opposition over fears that the data centers don’t offer enough benefit for local residents

The UK is attempting to position itself as a world-leader in AI technology, but a data center buildout is a necessary step in realizing that ambition and those living in the immediate vicinity of planned sites aren’t too happy.

In an effort to reduce the dissatisfaction of local communities, the UK government is considering setting a list of criteria a developer must meet to have a data center approved for construction.

The current list of criteria include investments in local communities, as well as meeting sustainability requirements and set agreements on energy use as part of an AI “covenant” with the British public.

British AI to be “distinctly Labour”

The current buildout of AI data centers in the UK has been fraught with delays in planning processes, a significant backlog of grid connections, and bottlenecks in hardware and cabling.

Microsoft recently pulled out of residency plans at the UK’s largest planned data center after learning the facility would not be connected to the grid until the early 2030s.

UK AI minister Kanishka Narayan has said developers should be “able to build British infrastructure, especially in areas like AI that are driving growth and creating revenue for public services.”

Data center developers who meet the “covenant” could be given priority access to power grids and fast-tracked planning approval, helping to secure funding for local areas while also helping to meet the UK’s AI goals. While no solid plans exist for how this investment could look, it could involve contributions to local infrastructure or payments to residents.

Speaking to the Financial Times, Narayan said that the government would not let the AI buildout purely serve “foreign firms and foreign billionaires,” adding that the government would seek a “distinctly Labour approach to British AI” that would help better serve the British public.

Several areas of the UK have been designated as AI Growth Zones by the UK government, providing developers with preferential energy rates in regions with excess – such as areas with strong renewable energy generation – while also allowing local authorities to keep 100% of the additional business rates generated by new developments.

AI buildout isn’t all sunshine and roses

The proposed AI “covenant” isn’t purely out of the goodwill of the British government. There has been significant opposition to data centers across the UK.

One data center planned to be built in Auchertool in Fife, Scotland, has attracted over 1,600 objections. The site – with a 600MW capacity – would be the second largest in the world once operational. The Scottish Parliament also backed a de facto moratorium on hyperscale data centers in September.

Similar plans for a 450MW data center on a former factory site in North Wales are being opposed by local residents and an online petition that has exceeded 26,000 signatures. The campus would occupy a brownfield site that has been derelict since 2008, but locals say the plans for the data center do not include clear and sustainable benefit for residents.

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