In recent months, AI has continued to dominate headlines, with major investments and technological advancements raising both hope – and, perhaps, some concerns.
Just last week, the government’s partnership with Blackstone, a £10 billion data centre investment in Northumberland, aiming to be Europe’s largest AI data centre, hit the headlines. While the scale of this investment has been praised as such a forward-thinking approach, it has also raised questions as to whether it’s too soon for such a heavy investment, particularly in light of Nvidia’s billion-dollar losses just a few weeks before.
So does AI stand up to its dizzying level of ‘hype’ or is its use and investment still in very early stages?
The ‘chicken and egg’ dilemma
There is no doubt that AI technology has been in an extremely rapid growth phase over the past 4-5 years. The abilities of the technology have come on leaps and bounds. But many assume this growth is the same as the level of investment it must receive across industries – this just isn’t the case.
The Blackstone initiative signals that major investors are pushing funds into AI, but it doesn’t signal whether the market demand really does exist. With Nvidia’s losses in mind, we might be jumping the gun based on inflated expectations, presenting a real challenge to surrounding infrastructure as these projects are rolled out.
It’s a ‘chicken and egg’ dilemma: what comes first, market demand or infrastructure? It could be argued that the infrastructure is needed first for there to be any real market demand, as we’ve seen with the likes of electric vehicles and the charging point ‘deserts’ that are pushing consumers to opt for internal combustion vehicles instead.
Sustainability as a key driver
Despite the question over market demand, investment like this could be hugely beneficial – if it’s done in the right way.
AI data centres are notoriously carbon intensive, consuming a lot of energy. Increased investment in AI infrastructure may drive the development of renewable energy, advanced cooling systems, and overall energy optimisation in data centres.
There is so much opportunity that lies in greener technologies in AI infrastructure. Advancements like heat reuse directing energy back to local grids, providing warmth for nearby homes, schools and public buildings, turns the challenge of public scepticism into a big community benefit.
Job creation and economic growth
Undeniably, investments like this create new jobs. Investments in data centres and AI infrastructure could introduce a number of opportunities for local economies, both in the construction of the centre and ongoing operational roles. I
Despite questions on timing, the economic effect of these kinds of investments is hard to ignore. Not only do they generate jobs, but they create vital, ‘future-proof’ tech roles in areas that are typically underserved and suffer from job scarcity; given the land required for a data centre, they are typically built on rural/suburban land for cost reasons.
The future of AI data centres
There are legitimate concerns around whether the market demand is there to meet the supply that huge AI data centres will offer, but it’s difficult to overlook the wider economic benefits of such an initiative.
Projects like the Blackstone initiative could serve as a turning point in AI infrastructure, both in advancing sustainability and in providing economic benefits. It could also bridge the gap between AI’s promise and its practical application, making it an exciting – if cautiously optimistic – development in the world of AI. It helps the UK substantially on its ambition to become an AI leader on the global stage.
If there is anything to learn from new technologies like electric vehicles for instance, it’s that the infrastructure needs to match the rate of technological development, without which market demand will never catch up. So perhaps this will lay the foundations for much wider usage.
For businesses, the key takeaway is that you haven’t missed the AI wave. There is a huge opportunity here, to pioneer this technology while it still provides a competitive advantage, and investment is only going in one direction. Importantly, the infrastructure will be there to support any and all transformation projects you wish to embark on.