Data centres are losing the political battle
MPs turn up the heat
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News In Brief 🩳
I'll raise you: Chip startup Fractile is in talks to raise $200m which would value it at $1bn, the FT reports. The London-based company said in February it would invest £100m over the next three years in expanding its UK operations as it seeks to eventually challenge Nvidia's dominance.
Work update: The government's new AI Economics Institute will be a joint Treasury-DSIT project and incorporate the already-established Future of Work Unit, AI minister Kanishka Narayan said. It will have a broader focus on the economic impact of AI, rather than only the labour market, he added.
Breakfast juice: Google announced the launch of a project called ‘AI Works for Britain’ this morning to help people use AI to advance their careers. They'll set up 'Squeeze the Juice’ bars in Leeds, Liverpool, and Birmingham to, you guessed it, help people "squeeze the juice" out of AI.
More please: Australia's eSafety Commissioner has accused some platforms of not doing enough to enforce the country's under-16 social media ban. It said it had "significant concerns" with the compliance of Facebook, Instagram, Snapchat, TikTok and YouTube.
Data centres are losing the political battle
Data centres face increasing scrutiny from Labour MPs and the Greens over climate impact, energy use and jobs ahead of a Parliamentary inquiry. A committee of MPs is asking why we need them, while mentions of them in Parliament quadrupled last year. The industry has done a poor job of countering these arguments, so far.
We agree with Ed: “Planned data centres will produce little employment, and blight communities – plus further jeopardise our climate targets," said Green Party leader Zack Polanski in a speech in March. His argument is identical to that made by allies of the energy secretary and, if The Times is correct, the real prime minister, Ed Miliband.
Miliband's former advisor and East Thanet MP Polly Billington told Politics Home days before the Polanski speech:
"We have to ask some questions about whether we want data centres which take up an enormous amount of water, and an enormous amount of electricity, and don’t create very many jobs.”
Miliband’s revenge: The tech department, DSIT, won its battle last year with Miliband’s energy department in getting a huge data centre project approved on the Teesworks site in north-east England, but Miliband’s allies are fighting back. Their argument, however, goes entirely against the government’s AI strategy.
You can't do that: “You can’t have a situation where you have data centres asking to be powered by gas, which is clearly counter to the government’s overall decarbonisation plan,” Billington said, except this is exactly what’s happening. Gas is their fuel of choice, along with backup diesel generators to cover for any power cuts. Energy network operator NESO expects their energy demand to go up between three and four fold by 2035.
We need an inquiry first: Parliament's Environmental Audit Committee has a call for evidence closing on Monday on data centres' climate impact. They'll hold evidence sessions after Easter, but when the committee chair, Toby Perkins, opens it with the quote: “It’s critical that we really consider what the impacts of data centres will be before we charge into approving them en masse,” you get a sense of where this one is going to go.
Green or growth? But fellow Labour MP Chris Curtis, who chairs the newly-formed Data Centres APPG, described the growth or green narrative as a "false choice". "A sustainable AI and digital infrastructure is at the core of our national economic growth," he said. "The question is how we can build the future of our economy and achieve our climate ambitions."
Saw this coming: The APPG will be publishing a paper with proposals, but so far the data centre industry has done a poor job of countering environmental arguments, despite them circulating for years. Energy and water use of data centres has shot up the political agenda in the last 18 months.
Change of message needed: Consulting firm Parisi, whose clients include data centre developers, warns them to “expect reputational scrutiny” and advises “silence is no longer a strategy”. More transparency and better data on water and energy use would help, as would dialling down the technical sell on them, while upping their community benefits.
Waiting for May: Wins for the Greens in May's local elections and the shift to the "soft-left" in Labour will further add to the pressure to prove data centres aren't fossil-fuel guzzling behemoths.
Look at US: The government, meanwhile, has done little to sell data centres beyond job creation claims, which isn’t their strongest point. Energy minister Michael Shanks told MPs in March that data centres wouldn’t push up energy bills, but in the US they have increased energy costs and it's become a political issue ahead of the mid-terms. The warning signs are the same here.
That's your lot, back tomorrow.
Tom