Drax, owner of Britain's largest power plant, has struck a deal with infrastructure investor Brookfield Asset Management and its AI-infrastructure platform Radiant to build a datacentre campus on the North Yorkshire site with eventual capacity exceeding 1 gigawatt.
The companies say the project could attract more than £20bn in investment, with the first phase alone requiring about £2.5bn.
Phase one targets up to 100 megawatts of capacity and commercial operation in the first quarter of 2028, drawing power through Drax's existing grid connections rather than directly from its own generation.
Capacity is expected to rise to as much as 500 megawatts between 2028 and 2031, with Drax aiming to begin powering the site directly by the early 2030s once regulatory approvals clear.
The station, which burns woody biomass pellets for nearly 5% of UK electricity, is the country's single largest carbon emitter, though Drax maintains the emissions are offset by regrowth in the forests supplying its wood pellets.
Government subsidies to the company will be cut to half their current £2m-a-day level between 2027 and 2031 as ministers signal a "much more limited role" for Drax's power generation going forward.
Chief executive Will Gardiner said the datacentre project would "help secure the long-term future of the site and protect hundreds of jobs" while "strengthening sovereign AI capability".
Drax's shares climbed almost 9% on the London Stock Exchange following the announcement, pushing its market value to nearly £3bn.
A planning application for phase one is being prepared, with public consultation expected to open in November.
