Labour’s AI ambitions will clash with its housebuilding targets
It was all smiles on Tuesday as Chancellor Rachel Reeves became the latest PPE grad politician to don her PPE robes, in a visit to a construction site in Waltham Cross where she unveiled Google’s new data centre.
The opening was a moment of celebration, as Google announced another £5bn investment into the UK, a move likely to add a few more data centres to the pipeline.
This is welcome news for the UK: in an AI-dominated world, we can’t compete without compute.
But beneath the surface, there were problems. When the first planning application for the site was submitted back in 2018, Thames Water warned it had “identified an inability of the existing water network infrastructure to accommodate the needs of this development proposal”, while a utilities report found the local power supply was inadequate and a new 6km-long cable would have to be dug underground (including drilling under the M25) to connect up to a second National Grid substation.
Plainly these issues were resolved, but it remains the case that data centres suck a great deal of water and electricity from their surroundings. That may not be a problem if nothing else is competing for them – but there is also the small matter of the government plan to build an extra 1.5m homes.
There are already signs the UK’s AI and housebuilding ambitions are clashing. In 2022, CIty AM reported that developers in three West London boroughs were warned they may not have electricity capacity for new homes until 2030, “largely due to a rapid influx of batteries and data centres”.
There was also a tacit nod to this back in January when the government published its AI Opportunities Action Plan. The UK’s first new “AI Growth Zone” would be opened in Culham in rural Oxfordshire, the government said. Why Culham? Because a huge nuclear fusion facility had just been decommissioned there – meaning it was just about the only place in the country with a massive power supply and no use for it.
In other places, resources are more scarce. AI’s power needs mean ministers face a dilemma in the coming months. Do we build a new town or a new data centre? The choice may be this stark.