9bn investment despite announcing one. The Department for Science, Innovation and Technology declined to answer detailed questions and said it was 'not playing an active role in auditing these commitments', The Guardian reported. The Guardian also reported that Cecilia Rikap, an economics professor at University College London, described the investments as 'phantom investments' inflated by big tech to please governments.
The UK government rejected the assertions, stating its AI sector has attracted more than £100bn in private investment since taking office and is growing 23 times faster than the wider economy. AI minister Kanishka Narayan told City AM that the figures reflect a pipeline of projects, not fully deployed capital, and that 'concerted progress' is being made with live data centres in Lancashire and spades in the ground in the Northeast. The government has announced a range of AI initiatives, including a £1bn quantum computing pledge, a £500m sovereign AI fund, and up to £250m in free compute for researchers and startups.
These are phantom investments. 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.
South Wales has been designated an AI Growth Zone with £10bn investment and at least 5,000 jobs, involving Vantage Data Centers and Microsoft at the former Ford Bridgend Engine Plant. The government will act as a 'first customer' for UK AI hardware startups with up to £100m support, and venture capitalist James Wise will chair the Sovereign AI Unit. Chancellor Rachel Reeves has pledged to deliver the 'fastest AI adoption in the G7', and the government has announced AI ambassadors including Simon Johnson, Tom Blomfield, and Raia Hadsell.
Additional funding includes £10m for semiconductor jobs in South Wales, £445m for Welsh rail, and up to £137m for AI-driven scientific discovery. 25bn in private investment committed in the last month alone. Private sector investments continue, with Databricks investing over $850m in the UK over three years.
It definitely takes time to get all the bits of building done right. You have to have spades in the ground, you have to hire people, you have to line the projects up, you have to build the whole thing, you have to operate it.
According to City AM, Michael Green, UK and Ireland managing director of Databricks, described the investment as a reflection of the UK's AI ecosystem. 8bn in Q1 2026, a 60% year-on-year increase, according to HSBC Innovation Banking and Dealroom. However, OpenAI has paused a multi-billion dollar data centre project in the UK, citing high energy costs and regulation.
Five US companies now control 70% of global AI compute, up from 60% a year ago, according to Liz Kendall. 6bn, and appointed Nick Clegg and Sheryl Sandberg to its board. On the jobs front, the Ministry of Defence is hiring an AI chief on a salary of up to £185,000.
No one is saying that we’re operating sixty-eight billion or whatever of data centres today as a result of those announcements.
The government estimates that between 10 and 30% of jobs are automatable using current AI technologies, and that AI is more likely to affect cognitive tasks. A DSIT survey found 97% of employers report at least one AI-related skills gap. The government has approved a £23m initiative to trial AI tutoring in secondary schools, according to Education Secretary Bridget Phillipson.
According to City AM, Stephen Hodges, chief executive of Efekta education group, described AI as a tool that keeps the teacher in control, while Nick Clegg said it does not replace teachers. Controversies have emerged around AI governance. According to The Guardian, the UK's Advanced Research and Invention Agency (Aria) has pledged £50m to US tech companies and venture capital projects, drawing criticism from Chi Onwurah, chair of the Commons science and technology committee, who questioned how this benefits the UK.
What we are saying is that we’re making concerted progress. We have live data centres in Lancashire already. We have spades in the ground in parts of the Northeast.
Aria responded that over 80% of its funding goes to UK-based teams and that contractual protections ensure benefits flow back. Separately, The Guardian reported that No 10 business aide Varun Chandra held 16 undisclosed meetings with top US tech executives; a Downing Street spokesperson said meeting businesses is a core part of his role. Ed Miliband was accused by a Whitehall source of sabotaging AI investment by highlighting data centre power demands, but a source close to Miliband said he was simply stating a scientific fact.
I think the way I think about sovereign AI and sovereignty generally is: What are all the things we can do to have strategic leverage as a country when it comes to AI? AI is increasingly the primary aspect of economic power and of hard material power. And so Britain needs leverage in this context.
I don’t think this is about Britain duplicating every part of the stack. It’s about us being selective: where do we have amazing strengths, heritage and the ability to lean into the future in Britain?
This investment is a reflection of the great ecosystem and the work that’s going on right now. The UK is a hub for AI innovation, and we are proud to make such a strong commitment to that.
We’re going through massive growth. If we didn’t do it now, we’d be bursting at the seams to be honest.
There’s no UK business that’s not doing that. Last week, we did our CIO forum, we had over 100 executives, C-suite in the room, and talking about the skills gap was a common message that we had.
I would say it’s how organisations are pivoting to make sure they get the best out of the data that they get, the true value and the ROI. Six months ago, all enterprises and FTSE 100 companies and everything were actually playing around. Roll forward six months later, and 57 per cent of those enterprises are now live in production.
Today, I am making three big choices on the greatest growth opportunities for Britain in the decade to come: growth in every part of Britain, AI and innovation, and a deeper relationship with the EU. Our plan is clear. To build for growth, to champion innovation, and to make Britain the place where the industries of the future are created.
In a world defined by technological change, Britain cannot afford to stand still. With this strategy, I believe we can approach the future with confidence – with the technologies of the future invented, built and deployed here in Britain.
There are a lot of school systems and governments asking themselves how they are going to tackle the teacher shortage. The system has always been designed with the human teacher at heart, and the teacher remains in control.
If the teacher doesn’t speak any English, they become a motivator and a coach.
You are not replacing the teacher. I think if it becomes a sort of reaction against all forms of technology in the education system, that would be a terrible disservice.
The more data you’ve got the more you can optimise your education.
Disguised as promoting moonshot projects, the government is using taxpayer money to further expand the power of the US tech ecosystem. This is not a surprise coming from a government that has agreed to be not only Trump’s, but also big tech’s, footman.
These reports on Aria’s spending underline the need for stronger scrutiny of the organisation, something its chair acknowledged when he appeared in front of my committee in 2025. The Aria Act requires the organisation to benefit the UK by driving economic growth, supporting scientific innovation or improving quality of life. It’s unclear how funding US-based venture capital and tech firms meets these aims, or aligns with the government’s commitment to regional innovation.
Our mission is to unlock breakthroughs that benefit the UK, which means funding the best ideas across universities, startups and private companies. Over 80% of our funding goes to UK-based teams — and where we fund international organisations, it is to transfer scientific capabilities to the UK, with contractual protections ensuring the benefits flow back here.
In this changing world, Britain is not powerless. We can shape our own future. Our method is stability, investment and reform – through an active and strategic state.