How Kao Data‘s Expansion Will Support Wider UK Growth

Kao Data’s Chief Commercial Officer, Spencer Lamb, announced its strategic plans to expand its footprint to Greater Manchester and the broader North West region at Connected North 2025 Data Centre Summit in Manchester.

These areas will support international data transmission by providing a combination of accessible power resources, available land and secure subsea cable connectivity. 

Spencer points to the fact that between 90% and 95% of the UK’s total data centre capacity is in West London, meaning the area has become hampered by limited available land space for new developments and severe power shortages. 

This can make it challenging to meet the rising demand of the government, enterprise and hyperscaler customers as it has led to a bottleneck where new capacity is hard to bring online. 

Regarding the expansion into Greater Manchester, Spencer emphasises the need to: “do something useful with the AI infrastructure, rather than just deploying it unnecessarily”.

“We saw it as an opportunity to deploy something that had scale [and] had the ability for our customers to grow quickly without having to move to a different building.”

What do Kao Data’s expansion plans entail?

Kao Data is in the process of completing a £350m (US$409m) data centre in Stockport. This facility is designed to offer 32MW of capacity and began construction in October 2024.

Spencer Lamb, Chief Commercial Officer at Kao, explains: “ We believe that our humble 32 megawatt [site] in Stockport is already not efficient, or not suitable for future growth. 

“We made that decision some two and a half years ago, and over those last two and a half years, things have changed materially in the industry… So, we’re going through another design evolution to get to the point where we can actually increase that capability. ”

The company is redesigning the site to double its planned capacity. This will help to accommodate larger hyperscaler customers and future-proof the site against growing AI and high-performance computing needs.

Kao is working with its build partners to decide the locations for new data centres beyond Stockport. 

Not only will this increase national resilience by reducing dependence on West London, but they will also utilise regional advantages, like available land, power and academic partnerships.

Naomi Timperley, Co-founder of Tech North Advocates and Innovation Director at Oxford Innovation, explains: “Greater Manchester and the wider North West are primed to become the UK’s next Gov AI Growth Zone, thanks to a thriving tech ecosystem and a rapidly growing AI sector supported by collaborative innovation.

“Our world-class universities not only produce exceptional talent but also retain it, fuelling a skilled and future-ready workforce. With a reliable power supply, strong digital and transport connectivity, and an abundance of brownfield land ready for data centre development, the region offers the ideal infrastructure for scalable AI growth. 

“We’re not just ready for the future—we’re building it here”

Supporting UK infrastructure growth

The UK Government’s AI Opportunities Action Plan points to the urgent need for data infrastructure and world-class computing to support national AI ambitions. 

Peter Kyle, Secretary of State for Science, Innovation and Technology, explains: “Our transformative planning reforms will make it easier to build the data centres that are the engines of the AI age. Skills England will help ensure that British people are prepared for jobs in the AI-powered industries of tomorrow. 

“The Digital Centre of Government I have created in my Department will drive forward the technological transformation of the state, ensuring that public services offer citizens the same seamless experience they can find in the private sector.”

Kao Data’s expansion into Greater Manchester will support this AI expansion goal. It is helping craft the infrastructure for AI adoption across the economy by investing in AI-ready, scalable data centres beyond the congested South East.

The Action Plan recognises that existing land and power constraints across London damage the country’s ability to meet growing digital demand.

Kao’s decision also showcases a proactive industry response to government calls for futureproofing AI infrastructure and regional digital resilience. 

The plan’s overall ambition is to create jobs and enhance economic growth through accelerated AI adoption. 

By reducing geographic risk, crafting AI infrastructure outside London and supporting national AI-led economic growth, Kao Data’s expansion strategy will support the UK’s ambition to become an AI leader. 

The impact on the data centre industry

Kao Data’s expansion plan will mark a strategic shift in the UK’s digital infrastructure landscape, where data centre locations become decentralised.

By focusing on the North West, Kao is supporting a more geographically diverse and resilient network, reducing dependency on a single region.

This will increase the resilience of government systems and critical businesses and create a greater regional balance of digital infrastructure. 

Kao’s decision will mirror the wider industry shift as other operators like Datum, AtlasEdge, Equinix, LDeX Group and Pulsant are investing significantly in the North West. Its scaling plans will likely create competitive upgrades among peers to serve hyperscalers and attract international attention to North West England’s subsea connectivity advantages (such as Blackpool’s cable links to the USA and Dublin). 

This could potentially make Greater Manchester another data centre cluster in the UK.

Andy Burnham, Mayor of Greater Manchester, explains: “The North West of England is ready to lead the UK’s AI revolution. Our outstanding infrastructure, businesses, universities and talent put us at the forefront of digital innovation.

“In Greater Manchester our Digital Blueprint sets out our commitment to harnessing the power of AI to drive economic growth, improve public services, and create a more inclusive society for everyone. Together, we can shape the future and ensure the benefits of AI are fully realised.”

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