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. Since 2024, successive Conservative and Labour governments have announced massive deals to build new datacentres, create thousands of jobs, and construct a supercomputer, with investments led by two firms linked to AI giant Nvidia: London-based Nscale and the US company CoreWeave.
According to a statement from the Department for Science, Innovation and Technology, the UK's AI sector has attracted more than £100bn in private investment since the government took office, with the AI sector growing 23 times faster than the wider economy last year. However, the investigation raises questions about the validity of these investments, with experts warning that 'big tech companies artificially inflate datacentres' job creation and economic impact to please governments,' as noted by Cecilia Rikap, a professor of economics at University College London.
The UK government's AI plans centre on two companies backed by Nvidia: Nscale and 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, and instead became a customer of two existing datacentres, renting space and deploying Nvidia chips.
Investment Claims and Reality
CoreWeave's investment amounts to the relocation of computer chips manufactured in Taiwan by a US company, with no indication of other investments beyond renting an office in London. The company said that bringing new datacentre capacity online by deploying chips within an existing site was an 'industry-standard' approach, but refused to say how many jobs had been created.
Nscale's flagship project, announced in January 2025, was to build a supercomputer site on the outskirts of Loughton in east London, a project dubbed 'the largest UK sovereign AI datacentre.' However, the proposed site was still being used as a scaffolding yard when the Guardian visited in February, and Nscale submitted a planning application to build there only 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, and the company could not say whether it owned the land or 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, and that the investment was 'not a formal contract, rather an intention to commit capital,' which may include equipment and capital funding.
Expert Analysis and Concerns
Cecilia Rikap, a professor of economics at University College London, said that 'these are phantom investments,' and that 'big tech companies artificially inflate datacentres' job creation and economic impact to please governments.' Dr Kat Jones, director of the Scottish countryside charity APRS, also expressed concerns about the claimed plans for 1GW of on-site renewable energy, saying that 'these plans are total pie-in-the-sky.'
The government's plan to deliver the infrastructure the UK needs and get it connected has been met with skepticism, with concerns that the value of these investments may simply enrich companies and investors that are largely headquartered in the US. The investigation raises questions about the oversight of these investments and the potential consequences for the UK economy.
Labour Market Data and Job Creation
The UK government has announced that CoreWeave's commitment to the Lanarkshire site is part of a package of investments the company 'has made to AI projects in the UK.' However, the Department for Science, Innovation and Technology would not say if it had audited this commitment or how – or if any of the investment had been received. 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.'
The government has said that the project will create 3,400 jobs in the construction of the facility, but CoreWeave said that 'any job projections that have been shared in relation to these UK datacentre efforts have originated from the UK Government and DataVita, not CoreWeave.' The investigation highlights the need for greater transparency and oversight of these investments to ensure that they deliver the promised benefits to the UK economy.
Personal Accounts and Entrepreneurship
The story of the UK's multibillion-pound AI drive is not just about investments and job creation; it is also about the people and companies involved. Nscale and CoreWeave are committed to further projects, including the establishment of Stargate UK, a 'critical' project to help develop the UK's own AI facilities on sites across the country.
However, the investigation raises questions about the validity of these projects and the potential consequences for the UK economy. As the UK government continues to work closely with Nscale and CoreWeave to secure these investments, it is essential to ensure that the benefits of these investments are shared by all and that the UK economy is not left behind.
