alt Hacker NewsRevealed: UK's multibillion AI drive is built on 'phantom investments'
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The UK has been chronically bad at providing jobs and training for its young people. I saw that 20 years ago when I was there. That is a key reason, perhaps the primary reason, for its long term productivity malaise. And the response is to lean into a technology that will make this situation profoundly worse? It's another lazy quick fix that is neither quick nor a real fix. The UK needs to invest in its people, not funnel yet more money to big tech.
> “mainline AI into the veins” of the British economy
Wow, what a terrible, yet perhaps inadvertently accurate, metaphor.
European AI investment plans are always so timid. This article mentions a couple of investments on the order of $1.5-2.5 billion USD that their government says "would position the UK as a world leader in AI". Hard to imagine you can be a world leader in anything when investing two orders of magnitude less than your competitors.
no-one will build AI datacentres in the UK, it has one of the highest industrial energy costs in the world. the only way anything is getting built is with govt subsidies
From what i gather the red flags are
- coreweave used the initial investment to buy gpus and put them in existing datacenters, rather than building new datacenters from scratch
- nscale is very behind on their planned datacenter, and will miss the deadline
- coreweaves new datacenter in partnership with datavita is probably on track, but its not clear how datavita will get the 1GW of energy to run it
I lean towards AI skepticism, but these dont seem thay bad to me. My guess would be the first 2 are the promises of silicon valley velocity hurtling headfirst into european administrative process.
And the third seems like just the challenge the firm has taken on, which could be solved with huge solar plant or something. We wont know until they try. Which is ambitious but theres nothing wrong with that.
If there were credible red flags as to the demand for the supply these datacenters will generate, or the projected 47b boost to the economy if that supply were produced, then thered be real cause to doubt. Because the whole value chain might not be well thought out. And thays the part i personally am not entirely sure about.
But if thats fine then just being negative because the companies didnt meet their how ambitions is a bit cruel. And this sort of attitude will just suffocate any silicon valley style dynamism that europe might be hoping to cultivate
These "investments" are rubbish. Show either deliberate misunderstanding how economy works or incompetence. If someone invests £100bn, what do you think they expect? The money to vanish or getting nice return? Yes, the scraps will go to interim workers, but at least £200bn will be sucked out of the UK economy back to investors, likely not willing to pay taxes.
If UK government wanted to properly invest in the AI, they would be developing chip fabs and embedding themselves in the supply chains.
It's a perfect time to build DDR5 factory, if GPUs are too large undertaking.
To build a Gigawatt AI data center in 2025 is reported to cost $35bn [1]. If you're not going to build it to top specs, why even bother. Given that this is the UK, once all the bureaucracy is done, it'll be at least 50% more expensive.
A large business is estimated to use 50MWh at £14,706 a year [2]. It'll cost in excess of £300k per year just to run electricity, not that the grid has that in spare capacity [3]. It's completely in contrast to their green energy campaign.
Then, they don't even have any kind of contract actually in place:
> Asked about the terms of the contract that Nscale had signed to build the supercomputer by the end of this year, the government did not reply directly. Instead, it said that Nscale’s entire $2.5bn investment was “not a formal contract, rather an intention to commit capital”, and “may well include equipment and capital funding”.
There's not enough serious capital invested to get this off of the ground (or even to break ground seemingly). And then there are basic questions, like:
1. Why would build a data center that is supposed to create tonnes of jobs, in a location where it costs a lot to employ people?
2. Why would you outsource your data center if you live in the US or EU, when there are better options available locally? These data centers sure as hell won't be used by British companies because the government are crushing them with tax.
3. The energy cost is far too high compared to locations with nuclear or hydro electricity generation.
This whole thing stinks. I think it's a complete and utter lie.
[1] https://uk.investing.com/news/stock-market-news/how-much-doe...
[2] https://www.moneysupermarket.com/gas-and-electricity/busines...
[3] https://watt-logic.com/2025/01/09/blackouts-near-miss-in-tig...
Happening in the private sector too. Something like 10% of US companies are actually using AI productively, and 42% killed their GenAI pilots in 2024.
Sounds a lot like Zuckerberg getting caught on a hot mike at the trump dinner about how many billion meta is investing
All made up bullshit numbers
It's such as shame to see the country that produced the Sinclair Spectrum and so many classic gaming legends become so irrelevant in computing and gaming..
The US is no different. All the deals seem to make sense until you take a step back and realize it's just a bunch of circular investments. This bubble bursting is going to be orders of magnitude funnier than the NFT/web3 implosion, I can't wait.
Just multibillion?
arent they all?
The current government, like the last one, are just a front for funnelling income tax from the poor to the rich, and of course doing whatever the Epstein Regime wants them to do.
But yeah, we need a power-hungry datacenter more than we need proper sewerage, proper water management investment, shorter hospital wait times, decent border patrol, or some of the fucking potholes fixed!
Still, it makes a change to just giving the money to the NarcoFührer clown in Ukraine, I suppose.
These big headline "UK investments" are always and without exception not what you might think they are. When you drill into them, which companies, what was bought, where was the profit realised, what actual _real_ R&D was funded? They balloons are easy to burst. No need to even get as far down the funnel as what products/services were brought to market, what was their adoption, and what shareholder value was created. I have seen almost 30 years of it now.
Partly it's because politicians think every dollar (pound) "invested" is the same, whether it goes on bricks and mortar or silicon or software.
UK has some of the highest priced electricity for industrial use on the planet. A result of deliberate policy choices. Who in their right mind would want to grow a vast datacentre estate there?