London Tech Week: £1bn investment is a drop in the ocean

As prime minister Sir Keir Starmer announced £1bn of investment to scale up UK computer power at London Tech Week yesterday, RSM UK says more support is needed to ensure the UK maintains its position as a world leader in tech. 

James Bull, senior technology industry analyst, RSM UK, said: “This is a step in the right direction and shows strong intent from government across infrastructure, planning and education. However, as CEO of NVIDIA Jensen Huang highlighted yesterday, the UK is the world’s largest AI ecosystem without its own infrastructure. While we may have one of the largest AI ecosystems, we do not currently have the infrastructure to be self-sufficient. Given AI’s potential and importance to the future economy, this investment feels like a drop in the ocean. 

“The potential productivity and economic benefits of AI are no longer in doubt, and the government’s focus should now be on funding, education and execution. £1bn sounds significant, but is it enough to make a difference, and provide the UK with its own infrastructure, given the amount being spent on AI globally? US data centre construction spend was $35bn in April alone, according to Wells Fargo. 

“Education and skills also need greater investment. The £187m across the whole education system to fund AI education works out at less than £50 per pupil, based on secondary education alone. This isn’t significant enough, and assumes existing teachers have the time and skills to deliver AI education. We know teachers are already very stretched. As the prime minister pointed out, the tech sector supports over 2 million UK jobs, and in 2023 the AI sector grew 30 times faster than the rest of the economy. This announcement is a significant commitment but more support for future skills, AI adoption and investment to enhance uptake is needed if the UK is to position itself as a global leader in AI and reap the full economic benefits. 

“The planning reforms currently underway should reduce red tape, enabling datacentres to be built faster, however, this needs to be in conjunction with further investment in electricity and cooling, which has so far been a limiting factor for UK datacentre construction. The announcement today of the government’s £11.5bn investment in Sizewell C nuclear reactor, and a further £2.5bn allocated to Rolls Royce to build the country’s first small modular nuclear reactors are a step in the right direction.”