Drax, the power generator, has agreed to develop a giant artificial intelligence data centre at its North Yorkshire power station with Brookfield, the investment group.
Brookfield estimates total investment in the project, including computer chips, could exceed £20 billion, with £2.5 billion earmarked for the first phase.
The partners are targeting more than one gigawatt (GW) of data centre capacity at the site, which would make it one of the largest in the UK.
Radiant, Brookfield's UK-based AI infrastructure business, will lead design and commercialisation, while capital will come through a joint venture between Brookfield and Qai, a Qatari technology company.
The first phase aims to deliver up to 100 megawatts (MW) of computing capacity, drawing power from the national grid, with operations starting in early 2028.
That phase still needs planning, regulatory and network approvals, an anchor tenant and final investment decisions from each partner.
A planning application is being prepared, and a public consultation is due to begin this month.
A second phase could add 500MW between 2028 and 2031, powered directly by Drax's own generating units rather than through the grid.
That would depend on a mechanism in Drax's biomass subsidy contract with the government, which allows up to 500MW to be diverted to a data centre if officials agree.
Any decision would weigh value for money for consumers, energy security and sustainability.
Further capacity could follow after 2031.
The site has around 4GW of grid access and 2.6GW of generating capacity, which Drax says makes it one of the few UK locations able to supply large amounts of reliable power directly to data centres.
Will Gardiner, Drax's chief executive, said the project could help secure the long-term future of the site and protect hundreds of jobs.
He urged the government to turn its support for faster power and planning access into delivery.
