This week, Amazon Web Services (AWS) announced that it would be investing £8 billion ($10.47 bn) in building, operating, and maintaining data centers in the UK.
While there will likely be the standard upset from locals wherever those data centers should be developed, this could be a sign that the work of Peter Kyle, Secretary of State for Science, Innovation, and Technology, is coming to fruition.
Back in 2023, when Kyle was merely the shadow secretary, reports emerged that he had headed over the pond to the US to meet with the likes of Oracle, Amazon, and Microsoft - likely to discuss the potential of bringing more investment to the UK. At one of those meetings, Microsoft was reported to have brought up the challenges of securing planning permission in the UK.
Since then, the UK government has been working to reform this, launching a consultation to update the country's national planning policy in August 2024.
“The proposed changes... seek to ensure the planning system meets the needs of a modern and changing economy, by making it easier to build laboratories, gigafactories, data centers, and digital infrastructure, and the facilities needed to support the wider supply chain,” the consultation said, and “giving more explicit recognition of the need to support proposals for new or upgraded facilities and infrastructure (including data centers and electricity network grid connections) that are key to the growth of these industries.”
We've also witnessed the government putting its money where its mouth is, with Chancellor Rachel Reeves announcing that two data center projects in London's Green Belt that were previously rejected, would now be reviewed in July 2024.
In her first major speech as chancellor, Reeves said: "The deputy prime minister [Angela Rayner] has said that when she intervenes in the economic planning system, the benefit of development will be a central consideration and that she will not hesitate to review an application where the potential gain for the regional and national economies warrant it," she said.
"And I welcome her decision to recover two planning appeals already, for data centers in Buckinghamshire and in Hertfordshire.”
The potential gain for the national economy should not be underestimated.
Amazon's newly announced investment in the UK is set to bring around £14 billion ($18.3bn) to the UK's total Gross Domestic Product through to 2028 (according to Amazon), and with the economy still recovering from the pandemic and years of mismanagement, this kind of investment is truly needed.
While addressing MPs in the House of Commons on July 30, Reeves said that the previous conservative government had left a £22bn ($28.04bn) “black hole” in public finances and that she had asked government departments to find £3.1bn ($3.95bn) in “efficiency savings.”
Sadly, one of the victims of those efficiency savings was £1.3 billion of tech and AI projects, including the UK's plans for its first exascale supercomputer built by the University of Edinburgh.
The cancellation of the exascale project was revealed in August 2024. At the time, a spokesperson for the Department for Science, Innovation, and Technology told DCD: “We are absolutely committed to building technology infrastructure that delivers growth and opportunity for people across the UK. The government is making difficult and necessary spending decisions across all departments in the face of billions of pounds of unfunded commitments. This is essential to restore economic stability and deliver our national mission for growth.”
The spokesperson added: “We have launched the AI Opportunities Action Plan which will identify how we can bolster our compute infrastructure to better suit our needs and consider how AI and other emerging technologies can best support our new Industrial Strategy.”
The answer, it seems, could simply be to turn to external investment.
While not explicitly stated in the AWS announcement, it is common knowledge that the major cloud providers are also key sources of the compute capacity needed for AI and "emerging technologies," as DSIT put it. In addition to bringing a cash injection into the UK, this move will also bolster the UK's computing resources.
It will certainly be interesting to see if the other major cloud providers follow suit and focus their energies and pennies on the UK, and if major compute capacity contracts from the UK government's side will follow.
As for bringing more data centers to the UK, provided the power grid can handle the load, such investment should be welcomed by the public, not just the government.
Reeves flew out to New York in August to meet with companies including data center provider CyrusOne and investment fund Blackstone, and both have been confirmed as attending the UK government investment summit on October 14.
Reeves said at the time: "Britain is open for business. As more investors sign up for our International Investment Summit, it shows they believe it too.
“They recognize we have taken some difficult decisions to fix the foundations of our economy and set us on a path to sustained economic growth as government’s number one mission – it is only by doing so that we can capitalize on Britain’s immense investment potential.”
That visit also saw Reeves meeting with CoreWeave, another company keen to spend money in the UK with plans to invest £1 billion ($1.27bn) in digital infrastructure announced in May 2024.
The progress we are all keen to see - be it the move to green energy, additional funding for the NHS, scientific breakthroughs, or increased support for the UK schooling system - all of this is dependent on having the cash available.
If the UK doesn't encourage it, then that money will simply go elsewhere.