Steps in the right direction: how datacentres can unlock the UK’s AI opportunity

During the industrial revolution, railways, roads and power stations facilitated economic growth. In the AI era, datacentres are the foundational infrastructure that will power UK innovation. The sector is making big investments to deliver the infrastructure quickly, sustainably, and in partnership with communities – but what more can be done to get these crucial facilities up and running?

From cancer detection to new scientific discoveries, AI is already catalysing opportunities for growth and productivity across the UK economy and public services. We are witnessing firsthand how AI is rapidly becoming the world’s next great General-Purpose Technology – like electricity and personal computers – with widespread applications and the power to reshape entire economies and societies.

AI is projected to increase GDP by £550bn by 2035 and could save the public sector over £17 billion. And like the early days of electricity, we're just beginning to understand AI's full potential.

Realising these opportunities will take broad diffusion of AI across every region and sector of the UK. That means people and businesses need access to the technology, and that requires the right underlying infrastructure to power the UK’s usage.

Datacentres – responsible for storing and processing the vast amounts of digital information needed to develop and deploy AI technologies – will play an essential role. The private sector is stepping up to deliver the investment needed.

The sector is focused on delivering those benefits locally, including through the creation of highly-skilled jobs and investment in community funds and skills programmes. This new infrastructure can see vacant sites brought back into active use, creating employment not just in operations but also in construction and maintenance. Understanding the full range of opportunities for local, long-term growth and renewal that can be realised, and how local partnerships can help shape that future, is something the industry must continue to explore and show leadership on.

We’re also seeing the sector champion innovation in datacentre construction to help meet the UK’s sustainability goals, whether that’s experimenting with new materials to reduce steel and concrete use, or finding innovative ways to reduce water usage for cooling. The industry needs to be laser focused on procuring 100% renewable energy for all our datacentre workloads and growing new renewable energy generation capacity through our own investments where we can.

While the private sector continues to make large investments in the UK to get this infrastructure in the ground, the Government has also recognised the importance of datacentres, designating the facilities as Critical National Infrastructure last year and committing to prioritise their development. This will require a streamlining of the planning consent process, accelerating access to power for new and significant connections, and offering predictability, which is critical to providing products and services to datacentre customers on time. AI Growth Zones could be another effective tool in driving these reforms forward and supporting local, long-term growth.

For example, where the National Planning Policy Framework has kickstarted progress by requiring planning policies and decisions to recognise and address the specific locational requirements for datacentres, the Planning and Infrastructure Bill can – and must - build on momentum to deliver the reforms in legislation.

Futureproofing our energy policy will also help determine how the UK seizes this AI opportunity. Ensuring fast-paced access to clean energy transmission connections remains critical to powering datacentres - infrastructure we know will be crucial to driving the whole UK Industrial Strategy forward. The UK’s Clean Power 2030 ambition and NESO reforms to streamline access to connections are a welcome step in the right direction to set the direction of travel on energy policy. It will now be important to deliver on the ‘first come, first ready’ approach to energy connections and quickly remove zombie projects that clog the queue.

The opportunity is before us. With the right infrastructure and policy in place, AI can become a powerful force for inclusive growth and positive transformation across every corner of the United Kingdom. To turn that vision into reality, governments and industry must continue taking rapid and bold steps in the right direction, together.

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Steps in the right direction: how datacentres can unlock the UK’s AI opportunity

techUK's Policy and Public Affairs Programme activities