Soaring energy costs are killing Britain’s AI ambitions

OpenAI announced last week that it is to pause Stargate UK. This was the multibillion-pound project designed to boost artificial-intelligence (AI) infrastructure in the UK. It was to include a large data centre in north-east England, in partnership with tech firms Nvidia and Nscale. Explaining its decision to put the project on hold, OpenAI pointed to a difficult regulatory environment and, above all, the UK’s high energy costs.

Unfortunately, this is not a shock. OpenAI’s struggle is an all too familiar and depressing tale of a deep, structural problem in the British economy – namely, our extortionate energy prices, which are some of the highest in the world.

After all, training frontier AI models and running data centres requires affordable and abundant energy. When energy is expensive, the cost of doing everything increases. This means that previously viable business models fall apart, and companies will think again about scaling up their operations, or will expand where energy is cheaper.

The repercussions of high energy prices reach far beyond cutting-edge technology. They determine whether a steel plant can stay open, whether a salt plant will close, and whether a new factory is built in the UK or elsewhere. If it costs far more to run a factory here than it does abroad, then industries and jobs will move.

It is the British people who then lose out. Industries that once defined and knit together communities are disappearing. Jobs that once powered the local economies of villages, towns and cities across the UK are moving to other countries. Wages that previously kept pubs and high streets alive now barely cover the basics. The impacts are felt not just through those industries that we lose, but also through those that never arrive.

This is the price the UK is paying for successive governments’ prioritising of ideology over affordable and secure energy. If we continue down this path, we will disqualify ourselves from hosting new and growing industries at scale.

This is why the pause of Stargate UK matters. It’s a signal – another flashing warning light – that Britain is not a viable location for those seeking to shape the technologies and capabilities of mankind tomorrow. But this outcome is not inevitable: those breakthroughs can still happen here, those jobs can still be created across the country, and those businesses can still scale up in Britain.

What we are seeing is not a product of fate, geography or an immutable characteristic of our isles. It is the result of political choice – a choice that has meant the country responsible for pioneering the Industrial Revolution is now failing to produce abundant and affordable energy. Government after government has backed down to consultants, lawyers, lobbyists and activists.

The government does not have to cave. Our politicians can change course. They can choose to rebuild our domestic energy production. They can prioritise the energy bills of households and companies across the country over pats on the back by their friends at Westminster dinner parties.

The choice is stark. With cheaper energy, industries can grow, businesses can scale up, families can afford a meal out. With the most expensive energy in the world, food costs more to produce and transport, businesses face higher overheads and those industries that could come here may choose elsewhere.

This is not a question of capabilities: Britain has the talent, expertise and potential. Instead, it is a question of will. If we continue down our current path, we will watch from the sidelines as other nations capture the benefits of tomorrow’s world. If we change course, we can bring back industries and jobs across the country, and define the future once again.

Dr Lawrence Newport is the CEO and co-founder of Looking for Growth, the political movement to end decline and save Britain.