Why global investment in the UK AI sector is a growth opportunity for all

In this guest post Javid Patel, senior director and head of public sector and the strategic advisory and transaction team at property consultancy Eddisons, part of Begbies Traynor Group, sets out the challenges and opportunities associated with the UK’s race for AI dominance

A recent surge in global investment into the UK artificial intelligence (AI) and datacentre sector is a promising and welcome endorsement in our market and its capability. But with this new industry needing high levels of power, is there a way to ensure these developments become part of and not a drain on community resources?

With £150bn of US investment announced as part of the ‘Tech Prosperity Deal’, there is a major opportunity for the UK to be a global leader in a growing industry.

This deal, which will see key tech players such as Microsoft and Nvidia supercharging AI infrastructure in the UK, adds to the announcement of AI Growth Zones, such as Blyth in Northumberland and Cobalt Park in North Tyneside.

This progress will also see further development and investment into billion-pound datacentre projects and creation of tech hubs and jobs in the region.

It is no wonder these global organisations are placing bets on the UK to become the next “AI superpower”. The UK has the advent of a stable regulatory environment in addition to strategic access to European markets. In addition, it has an enviable pipeline of talent coming from leading universities and educational institutions.

Add to this, ongoing backing from government to prioritise innovation in datacentres and AI through initiatives such as sovereign datacentres and “tech first” skills funding. This offers streamlined planning and infrastructure support to operators and a growing pipeline of skilled talent.

However, success in the sector is about much more than providing fast-track planning and having skillsets available. To attract and keep the best talent there is a need to understand how datacentre sites will impact the surrounding communities and utilities provided to those communities.

We regularly see reports questioning whether the electricity grid will be fit for purpose to accommodate vast growth in datacentre and AI infrastructure. This is compounded by concerns of water shortages and the need for fibre infrastructure upgrades to ensure new datacentres can be effective.

Ultimately, it is up to the tech supplier and the businesses that advise them to ensure the correct processes are followed, but there are many routes towards success.

Power sources and cooling mechanisms must be taken into account. Options such as installing reliable, decentralised energy sources or district heating systems that can move excess heat to be used by the surrounding community are available.

These ideas are just the start of a planning process, but they can make it evident that datacentres are contributing to a community rather than being considered as something that moves energy and resource away from it. It is delivering this reassurance that will also help attract and retain talent.

The benefit also has to be made clear to local businesses and that means the positive impact has to reach outside of the tech sector if it is fuel progress and attract tech talent.

Eddisons has developed a land availability database to assist companies in finding potential sites that can provide fertile ground for datacentres and AI, though options for hyperscale sites that are immediately available on a “plug and play” basis are limited.

This means the local authorities overseeing those areas and advisors have significant opportunities to leverage public and private funding and grow mid-size companies in the surrounding supply chain.

There will undoubtedly be plenty of competition, but businesses – many of which will be start-ups or existing SMEs – supplying the industry will have to demonstrate that they can deliver and meet the fast-evolving needs of the market.

It is going to be a highly-complex process of development, but with more global investment being attracted there are many people and businesses that can benefit from this future-thinking investment.

The construction and property sector has to feel a boost in jobs and prosperity to deliver the long-term projects across the UK that will support the creation of datacentres.

Engineering and manufacturing firms should be brought in to deliver the components and systems needed and develop their competitive edge on larger projects.

Even businesses in the retail and hospitality sectors around these emerging tech hubs who have been weathering difficult economic conditions, have an opportunity to benefit in this instance.

All of this ripple effect of activity brings more jobs in regions across the UK and increased chances of individuals and families relocating or deciding to stay rather than move overseas for tech careers. This could prevent a talent drain from the UK but also help regional economies grow.

The announcement of investment in AI and datacentres is the first step in a long-term project, but the key to the success of this investment isn’t just about getting the datacentres themselves set up. It has to deliver tangible outcomes for all connected communities and industries along the way as well as cutting off the widely reported flow of tech talent leaving the UK. This means planning for how industries, communities and people can grow as a result of datacentres and not feel drained because of them.