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Blackstone’s £10 Billion Data Centre Project in North East England Approved

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Blackstone, a prominent U.S. private equity firm, has received planning approval for its ambitious $13 billion “hyperscale” data centre project in North East England. The Northumberland County Council granted unanimous approval for the facility on Tuesday, with plans for the site in Blyth, Northumberland to span approximately 540,000 square metres.

The investment, which could reach up to £10 billion, will involve a large-scale data centre campus designed to meet the growing demand for data storage and cloud computing services. These “hyperscale” data centres are integral to supporting businesses, especially with the increased reliance on technologies like artificial intelligence.

The project is set to create substantial employment opportunities, with 1,200 long-term construction jobs and hundreds of positions for the operation of the centres. Additionally, up to 2,700 indirect jobs could be supported by the project. As part of the agreement, Blackstone will also contribute to a £110 million fund aimed at fostering economic growth and job creation in the region, particularly along the newly opened “Northumberland Line” railway.

This development follows the collapse of a previous plan for the site, which was originally designated for Britishvolt’s electric vehicle battery manufacturing plant before its closure last year. Blackstone’s initiative reflects the increasing demand for data centre capacity, driven by the surge in artificial intelligence and cloud computing, despite challenges in meeting this demand, according to recent research by CBRE Group.

Blackstone Remains Committed to Data Center Investments Despite DeepSeek Concerns

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Blackstone reaffirmed its commitment to data center investments on Thursday, dismissing concerns that the rise of DeepSeek’s low-cost AI models would weaken demand for physical infrastructure. The alternative asset manager, which holds $80 billion in leased data centers, emphasized its “prudent approach” and strong partnerships with major global companies.

Data centers remain critical for AI development, providing the infrastructure needed to store, process, and analyze massive datasets. While investors previously saw data centers as key beneficiaries of AI growth, DeepSeek’s unexpected emergence has sparked debate over whether lower-cost AI models could reduce demand for such facilities.

Blackstone’s President and Chief Operating Officer Jonathan Gray addressed these concerns in a post-earnings call, stating that while the company is monitoring DeepSeek’s impact, lower AI costs could actually drive broader adoption, ultimately increasing data center demand. “As usage goes up significantly, there’s still a vital need for data centers. We still think it’s a very important segment,” Gray said.

Analysts at Jefferies echoed this sentiment, arguing that hyperscale cloud providers are unlikely to cut capital expenditures given the intensifying competition in AI. Tech giants such as Microsoft and Meta have also defended their aggressive AI spending, insisting that substantial investment is necessary to remain competitive.

Despite Blackstone’s confidence, its shares fell nearly 4% in afternoon trading, reflecting investor caution amid the evolving AI landscape.

 

From $125,000 Loan to $8 Billion Deal: The Jersey Mike’s Journey

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At the age of 17, Peter Cancro made a bold decision that would turn him into a billionaire. With a $125,000 loan from his football coach, he bought a small sandwich shop called Mike’s Subs in Point Pleasant, New Jersey. At the time, Cancro was still in high school and had no intention of going into business. His plans were to study law at the University of North Carolina at Chapel Hill.

However, after some encouragement from his mother, Cancro reconsidered. What seemed like an improbable move quickly became a reality. The next day, he secured the loan from his coach, who was also a banker. By the time he graduated high school, Cancro was the proud owner of the sandwich shop.

The store was eventually renamed Jersey Mike’s Subs, and today it has grown into a global chain with nearly 3,000 locations. On Tuesday, the company’s latest milestone came when private equity firm Blackstone announced its agreement to acquire a majority stake in Jersey Mike’s. This deal, valued at $8 billion, increased Cancro’s net worth to an estimated $7.5 billion, according to Bloomberg.

In the early years of his ownership, the company faced many hurdles. In 1991, following a series of bank failures in the Northeast, Cancro found himself struggling to keep the business afloat. He had to make difficult decisions, including letting go of his entire corporate staff. Yet, he refused to give up. By 1994, the company was on the mend, and Jersey Mike’s expanded into North Carolina.

By 2006, the business hit another rough patch, as the aftermath of the dot-com bubble burst and aging stores began to impact performance. Cancro took a risky but necessary step, investing millions in store renovations. This decision paid off, and by 2007, Jersey Mike’s was back on track.

Today, Jersey Mike’s boasts an impressive annual sales growth of about 20% since 2019, with $3.3 billion in sales in 2023 alone. The company’s success continues to attract interest, as only 1% of franchise applicants are approved. Opening a new location can cost anywhere from $200,000 to $1.3 million, but with traditional stores averaging $1.2 million in sales per year, the investment can be highly profitable.

Cancro, now 67, will retain a minority but significant equity stake in the company following the deal. He will continue to serve as CEO after the acquisition, which is expected to close early next year. Reflecting on his remarkable journey, Cancro expressed confidence in the company’s future: “We believe we are still in the early innings of Jersey Mike’s growth story.”