The UK government's ambitious plan to 'mainline AI into the veins of the economy' has been marred by concerns over 'phantom investments' and shaky accounting, a Guardian investigation has found. The multibillion-pound drive, led by two firms linked to AI giant Nvidia, has been touted as a cornerstone of the government's promise to use tech to turbocharge the economy.
According to a report by The Guardian, successive Conservative and Labour governments have proclaimed massive deals to build new datacentres, create thousands of jobs, and construct a supercomputer. However, a closer look at the investments reveals that the money may not be real, the datacentres may not be new, and the jobs are unaccounted for. The UK's Department for Science, Innovation and Technology declined to answer detailed questions but said it 'rejected these assertions'.
The investigation raises questions about a series of massive AI investments announced globally in the past year, many in high-level press releases from governments and tech companies. With over £500bn promised in 2025, countries worldwide are seeking to conjure economic growth from AI's transformative potential. The UK prime minister, Keir Starmer, has said that if AI were 'fully embraced', it could bring £47bn to the economy each year.
Phantom Investments and Shaky Accounting
Cecilia Rikap, a professor of economics at University College London, has described the investments as 'phantom investments'. She said that big tech companies artificially inflate datacentres' job creation and economic impact to please governments like the British one, which are desperate to claim they are making the economy grow.
The UK government's AI plans centre on two companies backed by Nvidia: London-based Nscale and the US company CoreWeave. In 2024, Rishi Sunak's government hailed one of the first AI investments in Britain, a £1bn commitment from CoreWeave to help 'cement the UK's position as a world leader in AI'. However, planning records indicate that CoreWeave built no new datacentres at the announced locations.
CoreWeave became a customer of two existing datacentres, one built in 2002 and one built in 2015, both of which lease space to a host of other companies, including Google and Fujitsu. CoreWeave rented space in these datacentres and deployed Nvidia chips that it had paid for. Effectively, its investment amounts to the relocation into the UK of computer chips manufactured in Taiwan by a US company.
Supercomputer Site Still a Scaffolding Yard
Nscale's flagship project was announced in January 2025, when the government said that the company would build a supercomputer site on the outskirts of Loughton in east London. However, the proposed site was still being used as a scaffolding yard by a London-based company when the Guardian visited in February. Nscale submitted a planning application to build there at the end of February, after the Guardian had begun to make inquiries.
Land records appear to indicate that Nscale has not yet been registered as the owner of the site. Nscale could not say whether the company owned the land, and could not give a date on which any purchase had occurred. The government said that the figure Nscale had given for its investment in the UK, $2.5bn, was from Nscale itself.
Lanarkshire AI Growth Zone
CoreWeave is to back an AI growth zone in Lanarkshire, which the government has said will be completed within four years and bring the company's investment into UK infrastructure to £2.5bn. The development is a 'key pillar' of the government's industrial strategy. The government says the project will create 3,400 jobs in the construction of the facility; CoreWeave's partner, DataVita, has promised more than 1GW of onsite renewable energy.
However, the Lanarkshire site currently hosts a datacentre with 24MW of electricity – less than 3% of the promised renewable supply. Dr Kat Jones, director of the Scottish countryside charity APRS, has raised concerns about the claimed plans for 1GW of on-site renewable energy, saying they are 'total pie-in-the-sky'.
Government Response
The government has said that it will continue to work closely with Nscale in securing the investment into the UK. However, it is not playing an active role in auditing these commitments. A spokesperson for the Department for Science, Innovation and Technology said that the details of the Lanarkshire commitment are subject to DataVita and CoreWeave.
CoreWeave said that questions about its power usage should be directed to DataVita, its partner, and that the project 'remains on schedule, with the first phase expected to come online later this year'. DataVita did not respond to a request for comment. The government has said that datacentres are vital to delivering the benefits of AI, from boosting productivity to improving public services.
