Scotland must understand the risks in AI investment

There is quite a bit it is worth knowing before deciding your reaction to the UK Government's announcement that there is to be a major 'AI Growth Zone' in Scotland. Most of that information is likely to raise your scepticism.

Liz Kendal says this 'Growth Zone' is going to be centred around Airdrie, that it will bring 'more than' 3,800 jobs and about £8.2 billion of private investment to the area, based around the large AI data centres which process the data with which AI models are trained.

Let's look at the positives; it is suggested that about 800 of these jobs will be permanent rather than just construction jobs. It is argued that a high proportion of these jobs will be high-skill, high-pay. One of the partners involved is a Scottish-registered company. Scotland is greatly in need of boosting its computing technology-related industry sector.

So there could be benefits in principle. But there is plenty reason for concern. First, when a politician provides a jobs figure and the words 'up to' or 'more than' are included it is to be assumed they are gilding the lily. Stretching the credibility of economic growth data to its limits is standard practice in modern politics.

Of the 800 permanent jobs, there is some reason for scepticism. The announcement plays up the 'very high skill, high pay jobs'. Except anyone who works in recruitment of highly-valued staff will tell you that you locate operations close to the most desirable housing destinations. Staff recruited look for quality of life when they can command high salaries in competing countries.

It is not to decry Airdrie to suggest that either this is being seen as a commuter belt project or is overstating the case. Whether Airdrie really benefits from a short period of construction workers based in the area followed by a group of people commuting from the suburbs of Glasgow is questionable.

Then again, whether any of this is good for the economy is also questionable. It is widely pointed out that the investment that is going into AI is pushing up interest rates and energy prices and starving other parts of the economy of investment. Even the business press identifies the fact that taking away the financial bubble of AI investment would act as a significant boost to the rest of the economy.

Because the only guarantee here is that if this facility is built it will be enormously hungry for electricity and water, putting significant strain on the infrastructure of the surrounding area. As a reminder, that electricity production and distribution is privatised with most of the wealth likely to be exported out of the economy, as will profits from the AI investment.

We can say this with some confidence because the Scottish partner involved in this project (Datavita) is a legitimate company with a decade of experience in IT facility management (though it is on its third name in that period). But given that last year it filed accounts as a small business and the entire value of the company appears to be about 160th or 0.6 per cent of the finance necessary to build this facility, we can assume it is not going to be the beneficial owner.

That in turn suggests this is just going to be another US-owned project (the lead partner appears to be CoreWeave) which sees Scotland as a cheap electricity source with lots of water and a needy and compliant government.

And of course almost everyone is predicting a high possibility of a crash in the AI maket as an investment bubble bursts. Whether ground will be broken on this project before a possible collapse is unclear – as is the fate of the site in the event of a crash

But perhaps what should give us the biggest pause is the politics of this. This is a UK Government announcement and its obsession with AI is driven by dark, murky politics. UK AI policy is mainly being written by the Tony Blair Institute which appears to act as a surrogate civil service for the Starmer administration.

It received £257 million in donations from Larry Ellison (Trump supporter, top three richest people in the world and founder of Oracle IT corporation). Thast dwarfs the funding available to all other UK think tanks combined. The Tony Blair institue is also closely connected to Palantir, one of the murkiest and most concerning companies in the field.

The end vision of these people is a privatised public sector run by giant private corporations which use public data to run services but also use that data as the basis for enormous corporate profiteering in other areas. In particular, almost no-one has the all-society health data that the NHS holds. The TBI sees that as a future private sector asset and Ellison is explicit about it.

Genuine investment in advanced technologies in Scotland is welcome, but we need to be able to identify the difference between advanced industry and a real estate deal designed to leech off our national utilities infrastructure. We must also be cautious about assuming any real Scottish control over this project. We should be sceptical about the jobs claims.

But perhaps above all we need to be aware of the political intent behind this. The Starmer administration’s obsession with AI is an ideology that derives from some of the most concerning figures in Silicon Valley laundered through one of the most concerning think tanks in the world.

Scotland should think carefully about this before committing to anything.