How R&D can power a sustainable future for AI in the UK
AI’s rising energy demands in the UK
Artificial intelligence (AI) is transforming industries at an unprecedented pace. From healthcare and finance to manufacturing and education, AI’s applications and capabilities promise significant disruption across the economy.
But skyrocketing adoption is simultaneously resulting in drastically increased energy demand posing a challenge to energy grids and producers around the world. For instance, a single ChatGPT query uses about 10 times more energy than a Google search.
The UK Government’s ‘cloud-first’ policy only adds to the stresses already placed on energy producers, particularly in London and the Southeast. And while the ambitious UK Compute Roadmap aims to build a world-class compute ecosystem to support the growth and scalability of the digital sector, this rapid increase in energy demand will need to be addressed.
Smarter cooling: innovations reshaping UK data centres
Data centres are the backbone of AI development, but factors like their cooling requirements make them notoriously energy-intensive. Typically cooled by air-based systems, data centres are increasingly turning to liquid-cooling technologies that offer greater efficiency and use of space. This technology is growing in its maturity and other examples of more sustainably powered AI infrastructure are already emerging.
One is the University of Bristol’s new Isambard-AI supercomputer, a project supported by RSM UK. Launched in July 2025, Isambard-AI is housed in a modular, low-carbon data centre that uses a fanless, direct liquid cooling system. These innovations are reducing the required cooling power consumption, making Isambard-AI the fourth greenest supercomputer in the world.
The UK’s data centre demand is currently projected to grow by nearly 200% in the next decade and could make up close to 11% of our power consumption by 2035. Many of the 100 new data centres planned in the UK over the next five years are positioned close to urban hubs, meaning further innovation and collaboration is needed to avoid a disparity between energy demands and the availability of energy production infrastructure.
Nuclear and modular power: the future of AI infrastructure
To address the energy gap and infrastructure mismatch, data centre developers are exploring scalable, on-site power sources. Companies like Rolls-Royce are pioneering the use of small modular reactors (SMRs) to supply clean, scalable nuclear energy to data centres. These efforts, alongside renewable energy and battery storage systems, support the UK’s broader strategy to decarbonise energy-intensive sectors while maintaining technological competitiveness.
Funding and government support for sustainable AI growth
Government support such as R&D tax credits and grant funding can encourage investment in innovative energy solutions. However, accessing these credits can be complex, and businesses are advised to seek guidance from trusted advisers who understand both the technology and the legislative landscape to maximise funding opportunities.
The UK’s AI opportunity: bridging technology and sustainability
The UK is at a pivotal moment in its AI journey. With world-class research institutions, cutting-edge infrastructure like Isambard-AI, and pioneering energy solutions such as SMRs, the country is well positioned to lead in both AI development and sustainability. Promoting funding streams and cross-sector collaboration will empower UK-based engineering firms to invest in innovation and thrive in a competitive global market.
RSM UK supports initiatives that bridge technology and sustainability, offering tax and consultancy services, and helping businesses access innovation reliefs. By driving investment in development activities and supporting industrial and technology sectors, we play a key role in ensuring the UK’s AI ambitions remain both environmentally responsible and economically viable.
If your business is affected by these challenges, we can help you secure financial support and navigate innovation reliefs, as well as providing broader tax, transformation and consulting services. For more information, contact Lizzie Gosling, Joel Segal, Sheena McGuinness or your RSM adviser.