It’s a few months since we learnt that Europe’s biggest data centre might be built here in Hertsmere – what could stop it from happening?

In part three of our DC01UK deep dive we’ll look at the various obstacles that must be overcome before it goes live on the Internet in 2030 (some updated information about AI chips and Donald Trump’s sanctions on China added to this post on 8 May 2025).

Five ducklings in a row on a white table, walking across the frame right to left.

It might fall at the first hurdle. The scheme has outline planning permission from Hertsmere Borough Council so the developers must get their ducks in a row and submit a final plan. If we’re honest, though, this doesn’t look like a major concern: the council has given the project its enthusiastic backing and the UK government has cleared the way by adding data centres to the list of developments that can be defined as nationally significant infrastructure projects, alongside energy, transport, water, waste water, and waste projects (Technology Secretary Peter Kyle has even mentioned DC01UK in a speech). Unless something else goes wrong, the project is probably guaranteed to happen. So what else could go wrong?

Hertsmere MP Oliver Dowden stands in a field with a group of Potters BAr residents who are objecting to the construction of a new data centre in the area

The neighbours might object. As with any big development – especially one planned for land that is 100% in the green belt – local people are upset about DC01UK and have begun a campaign. Sadly for the locals, though, this scheme is going to be very hard to stop. As we said in an earlier post, this is the kind of land Angela Rayner calls ‘grey belt’ and even the green belt lobby seems to have given up. Our MP has met with the local campaigners but it doesn’t sound like he was able to give them much hope: “I encourage residents to submit their own views on the matter directly to the council,” he says. The fact that the developers plan to leave half the land as green open space and have promised substantial enhancements to the local environment will not help the opposition’s cause.

The demand might not be there. The trigger for DC01UK – and hundreds of projects like it all over the world – was the massive surge in demand for data centre capacity that we wote about in our first post, almost entirely the product of the AI and machine learning revolution – apparently an unstoppable and unarguable fact of the modern world. But the launch, only two months ago, of a new large language model (LLM), from a Chinese firm called Deepseek, suggests the direction for AI might not be quite as ‘up and to the right’ as had been hoped by investors. Deepseek wasn’t supposed to be possible. Biden era sanctions (including a three-tier provision called the AI diffusion rule that was meant to come into force on 15 May) limited the sale of the most powerful versions of the specialist chips needed to train and run serious LLMs to Chinese firms.

NVidia developed a special, less powerful version of its primary AI chip, the H100, in response to these limitations. The shock was that Deepseek was trained on these deliberately-limited chips. That a group of brilliant computer scientists was able to coax top-tier AI performance from second-tier hardware suggests that this might not be the brute-force business we thought it was to begin with. And since we wrote this paragraph the Trump administration first announced and then withdrew plans to limit further the kind of chips that manufacturers like NVidia can export to China; then went further and announced that the AI diffusion rule will not now be enforced at all and that individual, bilateral deals will be done for the export of specialist chips.

The Deepseek engineers made such resourceful use of the hobbled chips’ capacity that they were able to get around the punitive sanctions regime and keep China in the AI game. And, more to the point, if one Chinese firm can make more efficient use of AI hardware then the American giants, then so can anyone. Suddenly the AI game doesn’t look so one-sided and the soaring demand for newer and faster hardware doesn’t look so nailed-on. If more really can be done with less, then maybe the world doesn’t need the vast additional computing and data centre capacity that’s now being built. So do we think that the spreadsheets that justified DC01UK’s grand plans have been dragged to the trash? No, we don’t. The underlying growth in demand for the kind of cloud services that run in data centres like this one is unabated – and most of it has no need of LLMs – but has the gloss come off the AI data centre business? Just a bit. We’d like to have been a fly on the wall in a post-Deepseek DC01UK planning meeting that’s for sure.

An even more dramatic shift in the AI balance of power could result from the fact that Chinese manufacturer Huawei (the subject of much political hysteria here and elsewhere a few years ago) has just begun shipping test versions of its own AI chips, thought to be at least as powerful as the NVidia kit and, obviously, not subject to sanctions. China might be about to become a full-fledged AI superpower on its own terms. Will this development alter the investment priorities of the users or UK data centres? Who knows.

A vivid, graphical splash of water moving left to right through the air

It’s the water stupid. In