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US cloud computing giants such as Microsoft, Google and Nvidia are set to invest tens of billions of pounds into UK data centres. But there are doubts over whether the UK has sufficient energy and other resources to cope.
The AI boom is driving the big firms to beef up their data centres around the globe, and the UK has suddenly become a rich target for the tech giants. Microsoft, for example, will commit £22bn in investment over the next four years, half of which will be spent on improving its cloud and AI infrastructure in the UK, according to a report in The Financial Times.
Nvidia and OpenAI also plan to increase their investment in the UK, in announcements timed to coincide with Donald Trump’s state visit.
The new investments follow on the back of Google’s own expansion in the UK. It recently cut the ribbon on a new data centre in Waltham Cross and is planning to build another huge facility in Thurrock, Essex.
The construction of all these new data centres in the UK will raise questions over whether the country’s electricity grid can cope with the demand.
The enormous energy resources required by the data centres was highlighted by a report in The Guardian earlier this week, which claimed that Google’s planned 52-hectare site in Essex would emit more than 500,000 tonnes of carbon dioxide a year, the equivalent of 500 short-haul flights a week.
Google’s planning application for the site said it would have only a “minor adverse and not significant impact when compared to the UK carbon budgets”.
The data centres also often require huge amounts of water for cooling, at a time when large parts of the country are still under hosepipe bans after a dry summer.
Microsoft’s plans include what it claims will become the UK’s largest supercomputer, powered by 23,000 individual GPUs, but there’s little detail announced so far on how it plans to power the site.
Data centres currently account for around 2.5% of the UK’s energy consumption, but that figure is expected to rise four-fold over the next four years, according to figures given to Parliament.
There are also potential political obstacles ahead for the UK government and the big cloud providers.
“A few years ago this investment would have been inconceivable because of the regulatory climate,” Microsoft’s President Brad Smith said in a statement announcing the new deal, in a thinly veiled reference to the UK’s Competition and Markets Authority’s attempts to block the company’s takeover of Activision Blizzard.
However, the CMA earlier this year found Microsoft and Amazon held dominant positions in the cloud computing industry, which it claimed was harming competition. The CMA is weighing up whether to designate the two providers with strategic market status, which would give the CMA the power to regulate the companies more tightly.
Whether Microsoft will use its proposed investment as a carrot to ward off any future regulatory intervention awaits to be seen.
