Data centre investment may largely be fake

An analysis in today's Guardian raises very significant questions for the much-trumpeted arrival of data centres in Scotland. Central among those questions is 'is any of this real in the first place’?. To explain why we need to look back at a recent announcement in Scotland.

On 29 January our Daily Briefing was a rather sceptical look at an announcement that there was to be a data centre in Airdrie that was going to create 3,800 jobs and £8.2 billion of investment. That looked unlikely, but one of the partners behind the move seemed credible enough.

That company is CoreWeave, a US cloud computing and AI company, and it is significant in size and scale and does appear to make significant investments. But are they all they seem?

In 2024 Rishi Sunak made one of the UK's first big announcements about AI infrastructure; a £1 billion commitment from a company to build a major new data centre. (It is easy to feel that Mr Sunak may have been under-ambitious given that Airdrie alone is supposed to be pulling in eight times that much investment.)

So who is the company? It is CoreWeave, the same company behind the Airdrie plan, and its progress was rapid. It was only six months later that the two new data centres were announced as active - one in London Docklands, one near Gatwick.

The problem is that over the period concerned, no new planning applications were granted for a data centre and no new planning applications at all were granted to CoreWeave or any of the other partners in the project. In fact, all that happened was that CoreWeave became a customer of some existing data centres.

These are in no sense CoreWeave's data centres since they house a number of other companies including Fujitsu and Google. As far as it is possible to see, the only sense in which CoreWeave 'invested' here may be to have upgraded some computer chips. That is very much not the impression that was given.

Another £2.5 billion 'investment' is from a firm which claims to have secured a site and be months away from operation – but when The Guardian went to the site it turned out still to be a scaffolder's yard in a basic business park.

Perhaps the crucial information comes from an industry sector analyst quoted in the article; “The rules are very flexible and help [AI companies] to make these big claims and investments that a government like Starmer’s, which is desperate for good news, can use for their favour”. The rules say you can more or less lie because it is in the interest of the politicians as well.

It may not be surprising to discover this. The AI industry is often directly adjacent to the crypto currency industry and that is based on smoke and mirrors and confidence tricks. In fact all of this reflects the fact that, having spent £200 million globally lobbying to prevent governments regulating AI, the entire sector is a free-for-all of intellectual property theft and phantom investments.

In fact, it is all rather a good analogy for Scotland's entire inward investment strategy – the goal is the announcement, not the reality thereafter. AI is a complex industry sector in part because of its rapid and unregulated development. The investment sector is often defined by sleight of hand. Together they are ideal for creating the illusion of public benefit from AI.

Yet what The Guardian exposé show yet again is that we can be certain that these companies will mine other people's intellectual property and convert it into their private wealth but we have only the very vaguest hint that any of this is ever going to be in the public interest.

Yet it is in the interests of developers, investors and politicians to continue to boost this false narrative of an AI boom for the economy. AI may well turn out to be an innovation with economy-transforming capabilities, but that transformation will not come by being the nation that sacrifices its own energy and water infrastructure to large warehouses of computer chips – even when they exist.

Right now our only protections against this are scepticism, vigilance and scrutiny. There is little sign the politicians are acting on our behalf. It is therefore to be hoped that Scotland's journalists will soon be making their way to Airdrie (uninvited) to check in on the progress with this promised £8.2 billion investment and the 3,800 jobs it is creating.