BT Group and Nscale have announced plans to deliver sovereign AI data centres in the United Kingdom, using NVIDIA's full-stack AI infrastructure in a move designed to expand the country's AI computing capacity while ensuring data remains under British control.
The partnership will see Nscale build up to 14 megawatts of AI data centre infrastructure across three existing strategic BT sites in the UK, with BT providing the underlying infrastructure and connectivity. The three specific locations have not been disclosed.
The development extends BT Business's sovereign platform, which was launched in December 2025, to provide new AI services for both the private and public sectors. Organisations using BT's sovereign AI capability will be able to run AI models within the UK, supporting regulatory, data residency and security requirements; scale AI capacity on demand without upfront capital investment in infrastructure; and adopt advanced AI technologies while maintaining operational resilience and control.
Strategic alignment with government AI agenda
The investment aligns with the UK Government's AI Opportunities Action Plan, a strategy to boost economic growth through AI and data centre investment while ensuring national resilience and control. Data centres are classified by the government as projects of critical national importance.
AI Minister Kanishka Narayan welcomed the announcement, saying: "To unlock the full benefits of AI, Britain needs more of the infrastructure that powers it. This investment in new AI data centres will give businesses and public services the tools they need to use AI at scale here in the UK. Building more of this on British shores strengthens our position in a highly competitive global market, supports high value jobs, and ensures Britain can work with the best technologies in the world while growing our own capability at home".
BT's position as 'digital backbone' of the UK
Jon James, Chief Executive Officer of BT Business, framed the partnership as a natural extension of BT's unique position in the UK's infrastructure landscape.
"The development of AI and data centre infrastructure is key to unlocking economic growth in the UK, and is only possible with the best, most trusted networks at the foundation," James said. "Digital sovereignty enables UK organisations to adopt the world's leading technologies, while maintaining resilience and control in a rapidly changing world. Our collaboration with Nscale reflects BT's unique position as the digital backbone of the UK – the only provider with the scale, capabilities and experience to enable the nation's sovereign ambitions".
BT's sovereign portfolio, which now includes connectivity, voice, cloud and AI services, is now commercially available for public and private sector organisations. The company also launched Sovereign Cloud, hosted on Rackspace's UK data centre infrastructure, offering compute, storage and backup capabilities to organisations handling sensitive or regulated workloads, with UK-based, security-cleared teams.
Nscale's growing role in UK AI infrastructure
Nscale, founded in 2024 by Australian entrepreneur Josh Payne and headquartered in London, has grown with extraordinary speed into one of the central actors in the UK's AI infrastructure build-out. The company raised $2 billion in a Series C funding round in March 2026, valuing it at $14.6 billion, with NVIDIA as a strategic investor alongside Aker ASA, Citadel, Dell, Nokia, Jane Street, and Point72 among others. NVIDIA invested £500 million in Nscale in September 2025, describing the company as a "national champion for the UK". Nscale's board now includes former Meta Chief Operating Officer Sheryl Sandberg, former UK Deputy Prime Minister Nick Clegg, and former Yahoo President Susan Decker.
Tom Burke, Chief Revenue Officer of Nscale, emphasised the critical role of telecommunications infrastructure in the AI economy.
"Partnering with BT is a major milestone in supporting the UK's AI ambitions and its position in the global AI economy," Burke said. "Telecommunications have a critical role to play in this shift – you can't deliver AI at scale without resilient, high-capacity networks as the backbone. Together, BT's nationwide digital infrastructure and Nscale's modular, NVIDIA-powered AI data centre deployment will give organisations access to world-class compute, with the assurance that their data and operations can stay local".
A structural shift in UK AI infrastructure
The deal is significant less for its raw capacity figure, which by hyperscale standards is a relatively modest initial deployment, than for what it represents structurally. BT owns and operates the backbone of the UK's fixed telecommunications network through its Openreach division, with physical infrastructure distributed across more than 5,000 telephone exchange and central office locations across the country. Co-locating AI data centres with existing BT network exchange and switching sites allows Nscale to deliver low-latency AI compute close to BT's national fibre grid without the capital cost and planning delays of greenfield builds.
For BT, the partnership provides a commercial AI revenue stream from infrastructure originally built for voice and broadband, now being repurposed for AI compute, a structural monetisation of the network estate in the context of surging AI demand.
Industry forum and broader ecosystem
BT, Nscale and NVIDIA are among the founding members of the 'UK Sovereign AI Industry Forum', a coalition of leading British businesses working with the government to strengthen the UK's sovereign AI infrastructure, skills capacity and startup ecosystem.
Anthony Hills, Director of UKI at NVIDIA, underlined the importance of the collaboration: "Telecommunications is at the core of sovereign AI, because secure, high-capacity networks are essential to unlocking the UK's accelerated computing potential. By combining BT's trusted nationwide infrastructure with Nscale's AI data centres powered by NVIDIA, this collaboration expands access to sovereign compute under UK control, enabling telcos and their customers to innovate with AI while keeping sensitive data secure".
The partnership is expected to support a wide range of use cases, from AI-powered analysis of sensitive data in healthcare and research, to enabling AI in public services and critical industries such as energy, finance and security. Hosting compute resources locally means that organisations can meet compliance standards while still accessing advanced processing power.
Nscale's broader UK footprint
Nscale is already deeply embedded in the UK government's AI infrastructure agenda. In September 2025, alongside NVIDIA and OpenAI, it announced Stargate UK, an overarching infrastructure platform for sovereign AI workloads using NVIDIA Blackwell Ultra GPUs in Nscale's UK data centres. Together with Microsoft, it is building what will be the UK's largest AI supercomputer on its AI Campus in Loughton, Essex: a 50MW facility scalable to 90MW, planned to house NVIDIA VR200 technology and operational from the second quarter of 2027. The company has also struck a $14 billion GPU infrastructure agreement with Microsoft covering approximately 200,000 NVIDIA GB300 chips across sites in the United States, Portugal and Norway.
Nscale lists an Nscale data centre in Loughton and a partner facility in Slough, with the Loughton site currently under construction and aiming to go live by the end of 2026.
The BT deal is the latest in a series of partnerships that frame Nscale as the preferred UK-sovereign counterpart to United States hyperscalers. Where Amazon, Microsoft and Google build their own data centres globally and serve UK customers from those assets, Nscale's proposition is that it provides AI compute capacity physically located in the UK, with data remaining under British jurisdiction.
Sovereignty as a competitive advantage
The partnership comes at a time when sovereignty plays a critical role in the UK Government's AI strategy. According to research commissioned by BT from Assembly Research, sovereign AI represents an £18 billion opportunity for the UK economy. The government has also established AI Growth Zones, with the North East AI Growth Zone anchored by investment at two world-class data centre campuses at Cambois in Northumberland and Cobalt Park in North Tyneside, positioning the region at the forefront of the next technology revolution.
BT's sovereign AI services are designed to give customers the confidence to use them for sensitive tasks, including data analysis and research within regulated sectors like healthcare, energy, finance and security. The facilities are designed to support a range of workloads, from analysing datasets to enabling AI-led applications in sectors such as energy and security.
The partnership reflects a coordinated approach between industry and policymakers, with data centres positioned as critical national assets. As the UK competes in a global AI race that shows no signs of slowing, the ability to offer sovereign AI infrastructure may prove to be a decisive advantage for British businesses and public services alike.