UK unveils plans to mainline AI into the veins of the nation

Britain's government is adopting all 50 recommendations made by a venture capitalist to use AI to drive economic recovery, without even acknowledging the resulting energy challenge this strategy likely poses.

Under the AI Opportunities Action Plan, announced Monday, the administration claims that fully embracing the technology will boost productivity by 1.5 percent a year, gains said to be worth up to £47 billion ($57 billion) each year.

In an unprecedented move, Prime Minister Sir Keir Starmer said he will take forward guidance set out by Matt Clifford, a tech entrepreneur hired in 2024 to advise government on how AI could kickstart economic expansion.

The advice includes setting up "AI Growth Zones" with streamlined planning processes to expedite the building of more datacenters, beefing up national compute capacity with a new AI supercomputer, and the creation of a new National Data Library to "unlock" the value of public data in supporting AI development.

The government also talked up £14 billion in fresh investments from three companies – Vantage Data Centers, Nscale, and Kyndryl – to help build the local AI infrastructure. A number of US tech firms had already confirmed their intention to expand local data facilities in Britain last year.

However, this additional AI infrastructure will need power - and there are already issues with getting electricity to proposed datacenter sites. The "AI Growth Zones", we're told, will give them "better access to the energy grid," according to today's announcement, but where will the energy itself come from?

Last year, the CEO of Britain's National Grid was already warning that datacenter power consumption was on track to grow 500 percent over the next decade. And a recent report claimed that Americans face a 70 percent hike in their electricity bills by 2030 unless extra capacity is added to satisfy AI's thirst for power.

UK industrial energy prices are already the highest in the world, according to the Institute of Economic Affairs.

Perhaps recognizing there might be a latent problem, the government says it will set up a dedicated "AI Energy Council" chaired by the Science and Energy Secretaries. This will work with energy companies "to understand the energy demands and challenges" of its AI plans.

The government made no reference to solving the problem. We asked the Department for Science, Innovation & Technology (DSIT) if it has any plans for new capacity in the pipeline, and await a response with interest.

In recent years, local planning departments have declined datacenter planning applications for lack of available power, as one of the UK's major developers highlighted last year. With the "AI Growth Zones," the government seemingly has no problem with overriding concerns from local authorities.

"The announcements today largely build on those from last year, both in terms of AI infrastructure investment and government initiatives to boost AI pilots and further conversation around critical issues," said TechMarketView Principal Analyst Simon Baxter.

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"But creating more datacenters will not necessarily lead to higher AI usage in the UK. Certainly, when it comes to the use of AI in public services, there are no clear timelines on how quickly the technology can be implemented, and there is a risk that the impact of AI may be far less than expected."

Baxter also warned that public sector budgets are set to be even tighter from 2026 onward so most departments and agencies will be desperate to see early gains. And if they don't, they may well struggle to justify continued investment. Clear examples of any returns public departments are achieving from AI are so far missing, he noted.

The plans for a new supercomputer to drive the government's AI plans are also puzzling as one of the new Labour government's early announcements after being elected last year was the cancellation of an £800 million ($1 billion) exascale supercomputer project at Edinburgh University launched by the previous government.

The Register asked DSIT if this was a reinstatement of that project or a different one, and will let readers know when further details emerge.

"As for building more supercomputers to boost public compute capacity 20-fold and the announcement of the National Data Library, there are a lot of details lacking regarding the timelines involved," Baxter commented.

"Again, questions have to be asked as to how much such actions will move the needle on achieving that goal of a 1.5 percent productivity boost in the short term."

Starmer claimed that "our plan will make Britain the world leader" in AI, a piece of pure hyperbole given that almost all the action in AI is happening in the US or China, and even British success stories such as DeepMind are owned by foreign companies.

In contrast, Steve Brazier, founder and former CEO at Canalys told the analyst firm's Channels Forum last year that Europe has already missed the technology boat, and every office worker in the region is paying a €100-a-month "tax" to American companies for a right to work.

"And with the arrival of AI, that €100 a month is simply going to go further up," he claimed. ®