Hyperscale data centres in the UK: a symbol of Britain’s foreign policy dilemma

Data Centres UK Policy and Britain’s Foreign Strategy

At a recent Intelligence2 panel, national tech journalists attempted to answer the question of ‘whether Britain can become an AI superpower?’ Despite optimism about the UK’s AI strengths – from world-class universities to leadership on AI safety and niche specialisms – the conversation kept circling back to the same very practical constraint: Britain lacks the hyperscale data centre infrastructure needed to turn ambition into capacity. 

At first glance, the constraint looks technical. The UK’s bottlenecked grid means it lacks enough hyperscale data centres to support the compute-heavy demands of modern AI. Historically complex planning processes have exacerbated this, although recent government efforts have sought to cut the red tape when it comes to data centres. But this is not simply an infrastructure gap. It is a question of who controls the physical foundations of Britain’s digital economy. 

The hyperscale facilities that power AI are overwhelmingly owned and operated by US firms, built around American-designed chips – mostly from stock-soaring Nvidia.  

This mirrors another uncomfortable reality in UK policy. Just as Britain spent decades building economic models reliant on Chinese manufacturing and supply chains – only to worry belatedly about resilience and leverage – it is now reproducing the same dependency in digital form.  

Mark Carney’s ‘middle-powers’ speech at Davos speaks exactly to this uncomfortable reality. The UK has lofty ambitions on AI (and rightly so), but its reliance on US tech (estimated 80% of UK cloud is stored by AWS and Microsoft, and another 10% by Google) is one of the many dependencies that it will be re-examining as the global order appears to shift. 

The Cyber Security and Resilience Bill – which went into Committee stage in the House of Commons on Tuesday – is an opportunity for MPs to discuss the use-cases for US tech firms within our public services. The government has included proposed measures that designate data centres as essential services, and put in place stronger requirements for cyber security and operational resilience, aimed at closing the regulatory gap that could otherwise leave data infrastructure exposed to compromise.  

While detaching from US tech is an impossible thought – the UK needs to stay close to the companies at the forefront of the AI race – it must consider how it can work closely with European allies, and others such as Australia, Canada and Japan, about ensuring the technology of the future is not so dependent on America.  

In that sense, hyperscale data centres are a microcosm of Britain’s wider foreign policy dilemma. The UK wants strategic autonomy without separation, and AI exposes that tension more starkly than most technologies. The real question is not whether Britain can become an AI superpower, but what kind of power it can be when the foundations of intelligence are increasingly owned elsewhere.