The Scottish Government is speeding an enormous amount of disinformation about data centres. it is important for democracy that these distortions are challenged.
Over the last week the Minister for Artificial Intelligence has come up with an endless queue of distorted facts and misinformation. Perhaps there is a wry appropriateness in that (he seems less likely to be reliable than a chatbot), but it is bad for democracy. So allow us to correct some points.
You need data centres to be part of the AI revolution
No you don't, you need a fibre optic cable that links you to a data centre, like you don't need your own web server to browse the internet. Where the data centres is is irrelevant. But then you already know this, because you're already using AI and we don't have any data centres.
Data centres will fuel an economic boom
No, AI may fuel an economic boom but having the data centre gives you no advantage, for the same reason as above. It just doesn't matter where the data centre is. In fact it is an economic disadvantage to have a data centre because you have handed over massive energy resources for no real return.
This is what is being obscured. There is no productive economic output from a data centre. They are simply computers. Someone somewhere in the world makes an AI query via (probably) an American corporation. That corporation breaks the query down to what is effectively a mathematical puzzle.
It then sends the puzzle to a data centre somewhere (it doesn't matter) to work the puzzle out which it then sends back to the US corporation which sends it to you and charges you for it via credits (or with Google, advertising revenue).
The data centre runs at cost. It makes no profit. It is not part of the economy in the way you think of it. It's like a sweatshop for big tech but with no jobs and no real output.
It will boost public finances
As per above, no it will not. There is almost nothing to tax. Data centres do not make a profit. They are a property speculation. The owner takes a 'rent' but the actual data processing does not generate wealth in Scotland.
Other than Income Tax paid by the owner, the only tax a data centre pays is business rates on a warehouse. And if the Scottish Government lets these be built in one of its 'freeports' (dear god) then they may not even pay business rates.
The public will get no meaningful financial gain of any sort from a data centre.
But supply chains...
Those are basically just Taiwanese computer chips and Scotland's foreign-owned energy system. The supply chain benefits go to Spain (who own much of our energy), Taiwan and the US. Scotland will build the warehouse. That's it.
Data centres are like whisky bonds
Surprisingly, that is true. A whisky bond is a big warehouse where whisky can be stored tax-free until it is sold. Now think of a giant whisky bond for American bourbon where an American product gets tax-free treatment – until it is teleported to the US where the tax is paid, with Scotland getting nothing.
AI will create great wealth
Will it? No AI company has ever made a profit. Neither OpenAi or Anthropic have ever paid tax because they are massively loss-making. Nearly half of the bonds (the borrowing) for data centres this year are now rated as 'junk'. Wall Street is panicking at almost subprime levels just now.
“if we are not to make yet another mess of grasping the advantages of AI we need to understand what we’re talking about and not be led around by the nose by lobbyists for US oligarchs”
As AI bonds are falling, Credit Default Swaps (sort of 'insurance against our investment failing') are soaring, as per the 2008 financial crisis. Why? Because the modelling says the AI companies must find a way to generate annual revenue of nearly $9 trillion within about three years to pay off their debts, and no-one has any idea how to do that.
There are undoubtedly benefits to AI but at the moment the risks are phenomenal and it is not clear how much Scotland should bet at this stage.
What about a wealth fund?
See above, that is a fantasy.
We need to show Scotland is open for business and attract investment
This just means 'we must lick the boots of US Big Tech and hope that people don't notice that the so-called inward investment just meant handing over Spanish-owned Scottish electricity'. Getting on your knees for oligarchs seldom works.
And none of this is cost-free. Energy is a resource; if we use that resource to ingratiate ourselves to US oligarchs we can't use it for something else, something real and productive. Handing over all your energy to non-productive warehouses means you have locked real industry out of your country because it will not be able to get access to or afford the power it needs.
Once we have the data centres, we will try and have only good AI in Scotland
This is the most embarrassing comment of all. The idea that the Scottish Government can somehow make sure only 'good AI' is used in Scotland by people using it for 'good purposes' and that we can keep 'bad AI' out is not something an adult should say.
And it remains unlinked to hosting data centres.
This will increase national data security
This is as outrageous a statement as the 'only good AI' one. Perhaps if these were nationally owned data centres controlled, monitored and regulated democratically by the state it could improve data security. These will be owned by Trump-aligned US billionaires.
A worrying proportion of the people behind the data centre industry have dodgy or outright criminal records. They have previously been involved in other property scams or in the shady Bitcoin mining industry.
A data centre in Motherwell could be used to synthesize a biotoxin by terrorists at the other side of the world and the Scottish Government would never know. 'Data security' and 'mass-scale AI' are the opposite of each other.
We can persuade the public
The Minister believes that if only the public knew the facts we'd be delighted about all of this. This is totally delusional. Globally the anti-data centre sentiment is dominant. In the US over 70 per cent of the public strongly oppose data centres. There are large majorities against among the voters of every party.
Voters will punish those who impose data centres on them because that is what has happened everywhere in the world they forced data centres on people. Scotland is already clearly on the same trajectory. For goodness sake can you sniff the air and understand what you're about to do.
And yet...
We at Common Weal are not luddites, the sort of 'anti-lightbulb' people the Minister accuses of clinging to candles, afraid of the future. We believe there are real advantages to be derived from AI.
But if we are not to make yet another mess of grasping those advantages we need to understand what we're talking about and not be led around by the nose by lobbyists for US oligarchs. This cannot be another disaster like ScotWind where the nation was taken for a ride by lobbyists and bad government decisions.
Unless the Scottish Government starts making sense on this issue, we remain concerned the same mistakes are going to be made.