Britain can lead on AI, but only if its firms can get the power to build it, write Grant Shapps and James Marks 

One of us runs an AI business in London and is asked every few weeks by investors when he’s moving to America. The other spent years in government, including as defence secretary, worrying about what happens when a country relies on infrastructure it doesn’t control. We’ve reached the same conclusion from different directions. Britain’s AI ambitions are stalling because British firms can’t get the computing power they need on fair terms. 

Compute is the processing power AI runs on. It is becoming as fundamental to the economy as electricity, and as strategically important as energy security. Last week’s Budget showed the government is finally waking up to understand this. The new British Data Centre Covenant offers priority grid access to developers who invest in jobs, local communities and water. There’s £500m for AI safety and security, and £140m to back British AI companies. 

The direction is right, but the investment landscape is less forgiving. Last month Microsoft walked away from a planned AI data centre in Essex because it couldn’t secure power in time. More than 70GW of data centre projects are queuing for the grid, against roughly 5GW the system operator expects to connect by 2030. Businesses pay almost double what they did for electricity in 2019. Investors notice these things, and capital is mobile.

This is a resilience question as much as an economic one. A country whose hospitals, banks and defence systems increasingly run on AI cannot afford to have its most innovative companies priced out of the compute they need, or to rely on a handful of overseas providers for capacity it cannot secure at home. 

Five companies now hold an estimated 71 per cent of the world’s AI compute, and four of them plan to spend around $725bn on infrastructure this year. Whoever controls compute increasingly shapes who can build AI, where, and on what terms.

Keeping sensitive data on British soil is welcome, but it means little if British firms can’t get that capacity on fair terms. Often they can’t. Compute is bought in an opaque market, listed prices rarely match what’s paid, quotes expire before finance signs them off and the biggest buyers get the best deals. A British start-up is negotiating against the world’s largest companies.

That’s what’s at stake. If only the biggest players get a fair price, Britain’s AI firms will build on someone else’s terms, or leave. Every founder who moves to San Francisco takes the jobs, tax and know-how with them.

Britain must seize the opportunity in front of us. This technology can help deliver the much-needed economic growth and sovereignty Britain needs in an increasingly volatile world. Growth on this scale, however, does not come without consequences. AI is already having profound effects on ecosystems and workforces across the globe, and the companies driving that change need to take responsibility for those consequences before they become impossible to reverse.

Government announcements won’t fix this alone, and industry doesn’t need to wait to be told what to do. The Covenant sets a floor: build here, and give back to the communities that host you. The whole industry should meet that standard. If you help build something this powerful, you share responsibility for what it does.

That’s why Canopy is committing a share of its profit to a new founders’ initiative, and why in January we’ll be at Davos working with others to do the same. The early focus is on four areas: the communities that host AI’s infrastructure, so they share the benefits as well as the costs; workers whose jobs AI is changing; young people who lack access to AI and computing education; and independent research on AI’s real footprint.

Responsible growth doesn’t slow investment. It makes infrastructure secure and trusted by the communities that host it. EY found firms with stronger responsible AI practices were more likely to report gains of 80 per cent across efficiency and innovation.

Britain has the universities, the talent and the capital markets to lead. What it needs now is a compute market that works for everyone, not just the biggest players, and an industry ready to take responsibility for the future it’s building.

We want that future built in Britain. Let’s make it easier for firms to stay.

Sir Grant Shapps is a former secretary of state for defence and secretary of state for energy. James Marks is the founder and CEO of Canopy