The deal is dead, long live the deals
Six months on from the US-UK tech pact
Happy Monday from a very windy beach and welcome back to this 100% human-generated newsletter — apart from my new mate Sam who'll read it for you 👇.
A message from Locai Labs
SPONSORED: The UK has missed the boat on foundational AI right? Not so fast. Meet one entrepreneurial family that thinks otherwise. London startup Locai Labs has developed a UK LLM by post-training an open source model using just one node of GPUs and a tiny budget. How? Why? Find out more and get in touch with them or just chat to it at GB1.ai.
News In Brief 🩳
Incoming: The Competition and Markets Authority is expected to publish its decision on the cloud market in the next couple of days.
Smashing the crystal ball: Ministers are looking at whether to trigger a break clause in Palantir's controversial contract with NHS England, the FT reports. More on struggling US-UK tech deals below.
License to ban: Ministers are also more confident about going further on social media restrictions after last week's landmark ruling in the US against Meta and YouTube. Keir Starmer told the Observer that "addictive algorithms" should be banned and described the US case as a "turning point". The EU is already taking steps against infinite scrolling. Austria, meanwhile, is the latest country to say it will ban social media for under 14s.
The deal is dead, long live the deals
It's six months old, but the US-UK Technology Prosperity Deal has had a cursed life. Its chief architect, ex-ambassador Peter Mandelson, has disappeared in disgrace, while the relationship between the two countries’ leaders has nosedived.
Right about now: Six months after agreeing it, so about now, US and UK ministers were meant to be meeting for a "working group"; instead the deal, which was meant to usher in a new era of cooperation in AI, quantum and nuclear, is on life-support with nuclear energy the only area where talks are still happening, the FT reported last month.
But we got the money right? Alongside the pact in September, US companies announced £31 billion of tech investment in the UK. Those investments were not dependent on the political agreement, but they're running into delays for different reasons.
We might have to revise that date: Nvidia said last September it would ship up to 120,000 of advanced GPUs to British data centres, funded by investments from Microsoft, Nscale, OpenAI and CoreWeave. But there was only a timeline on around 60,000 of those. Nvidia said in September they would come, “by 2026”, roughly split between CoreWeave and Nscale. The company wouldn't give an update when I asked last week.
Happening: The CoreWeave project in Lanarkshire, Scotland, which could eventually take around half of those GPUs, appears to largely be on track. Work on the £1.5 billion project started in February in partnership with a company called DataVita and in January it was named as an "AI Growth Zone" by the government.
The Essex jewel: But the centrepiece of the investment announcements - a plan by Nscale and Microsoft to build what would be Britain’s biggest data centre is still a scaffold yard. That site in Loughton, Essex, was meant to house around 23,000 GPUs and be open by the start of 2027.
20 years in the making: However, Nscale only started putting in detailed planning applications for the site last month. For a sense of how long these things take, the yard was first approved for a data centre almost 20 years ago, in 2007. The latest application was approved in June 2024, before the Nscale investment was announced.
Planning patience: Nscale must now get approval for more detailed applications from Epping Forest Council. That will happen but it won’t be quick. A consultation runs until mid-April, meaning approval is likely later in the second half of this year. The initial open date of early 2027 now looks more like a construction start date. Nscale said there were no updates on timings when I asked this month.
The update is there's none: Much of the headline £31 billion tech deal investments comes from Microsoft which said it would invest £22 billion in the U.K. over four years. Around half of that figure would go towards capital expenditures on AI infrastructure (including the Nscale site), while the rest would support the company's UK operations. Microsoft also said it had no update when I asked earlier this month.
Pounds not promises: “We're focused on British pounds, not empty tech promises,” Microsoft President Brad Smith said in a press conference last September, but delivering these projects will take years, despite the tiny timelines promised at the time.
Stars in their eyes: Nscale was also partnering with OpenAI to create a "Stargate UK" project - referencing the massive AI infrastructure investments being made in the US. OpenAI was meant to take up to 8,000 Nvidia GPUs at the start of this year as part of the AI Growth Zone in north-east England. OpenAI said there was no update on that when I asked last week.
Bottlenecks? We've got a few: That OpenAI investment is relatively small, but the wider AI Growth Zones are also running into delays. Minutes from the government's AI Energy Council meeting in December show “supply chain bottlenecks were repeatedly identified as a major challenge”. On the government side, officials in the meeting “underlined the urgency of clearing barriers to energy supply”. The government isn’t expecting the large data centres in its designated AI Growth Zones to come fully online until the early 2030s.
Promises not pounds: All this will feed into wider scepticism about the “empty tech promises” Smith himself identified and the potential of AI infrastructure projects to help transform the UK economy. More on that later in the week.
Monday Movers 👩💻
Get in touch to share your career updates.
Liam Wilkinson is leaving as Head of AI Incubation at the government's Incubator for AI. The AI Security Institute, meanwhile, is looking for a strategy lead.
Your weekly reminder: The Morning Intelligence is free for another two weeks, until Monday April 13. From that date free subscribers will still receive the newsletter each day, but will only be able to read a preview at the top. Paid subscribers get everything. The first 30 days of all paid subs are free if taken out before April 13. After April 13 only seven days will be free. You can upgrade anytime to a single or group sub here.
Back tomorrow,
Tom