It’s not uncommon for governments and developers to announce massive deals to build new data centres, promising thousands of jobs and vast economic growth. However, recent media investigations (Guardian, 2026; Financial Times, 2025) have painted a very different picture, claiming that many of these promised projects simply do not exist. Economic experts have labelled these projects that don’t come to fruition ‘phantom investments’. They serve primarily to artificially inflate economic impact figures, creating an illusion of growth without delivering any physical infrastructure. Furthermore, they cause grid connections to stall.
The problem of data centre ‘phantom investments’
Posted on in Blog
Announced but not seen through
The strain on utilities
Data centres are critical infrastructure – technological and digital development cannot continue without them. When developers make bogus claims about upcoming projects, they muddy the waters for the entire industry. Often, developers rush to stake claims on power capacity long before they secure the necessary capital or develop a concrete strategy for construction. Estimates suggest that a staggering 90% of these power connection requests are actually false.
This flood of speculative requests places an enormous burden on utility companies. Tasked with managing finite power resources, grid operators must somehow determine which projects are real and which are merely speculative.
Faced with this uncertainty, utilities understandably hesitate to allocate power. They cannot risk committing grid capacity to a project that will never materialise. This hesitation slows down the entire development cycle, creating bottlenecks that hinder the companies ready to build actual infrastructure.
According to Oxford Economics, two main factors explain the massive discrepancy between initial connection requests and the actual power draw expected from mature data centres:
- Speculative requests: the removal of connection requests that are unlikely to ever proceed accounts for almost 90% of the difference between total requests and actual power draw.
- Capacity overestimation: the remaining gap is explained by the difference between the massive capacity developers initially request and the actual, much lower power draw a facility will need at maturity.
Genuine construction projects
It takes immense effort, rigorous planning, and substantial time to bring a data centre online. Constructing a data centre is much like an iceberg. The final physical build – the part everyone sees – is just the tip. All the critical work that happens before a shovel ever enters the ground remains invisible to the public.
Long before developers can make responsible public announcements, they must complete an exhaustive list of preliminary tasks. This includes detailed feasibility studies, ensuring stringent regulatory compliance, and drafting both conceptual and detailed designs. Teams must conduct thorough risk assessments, secure numerous planning approvals, and carefully select vendors. Only after finalising complex utility contracts and sourcing materials can the actual physical work begin.
Understanding this complexity highlights why responsible planning matters. Navigating the extensive groundwork is a challenging but necessary part of the process. For instance, the completion of our MCR2 facility in Manchester in June 2025, alongside the start of construction of FRN2 at our site in Farnborough towards the end of last year, represents the culmination of this invisible iceberg. These milestones were achieved only after an extensive period of rigorous preparation.
Responsible planning
To ensure the continuous growth of our digital economy, the industry must prioritise genuine development over speculative projects.
As for us, we’re focusing on what we do best: growing our data centre infrastructure so we can continue delivering high quality service, resilient colocation, and bespoke solutions with a personal touch – choosing to let our services speak for themselves rather than joining the race to make ever-bigger promises. To find out more about our colocation offering, get in touch or come and visit one of our sites in Manchester or Farnborough.