Starmer's 'AI superpower' dream at risk without urgent changes, industry warns

Sir Keir Starmer's goal to make the UK an AI superpower is at risk without urgent changes, a new report from industry warns today.

Attracting investment from tech giants to build the massive data centres needed to train the AI models at the heart of the current boom is a key plank of Labour's growth plan. And this week, bosses from some of the most influential companies in the sector - like Nvidia - are in the UK as Donald Trump visits.

Politics live: Follow the latest updates But the UK could lose out to rivals in the EU and the Nordic states if it does not change its approach to energy pricing and copyright law, the report says. In the document, UK-based datacentre builder Kao says the UK risks becoming an "AI taker, not maker" - an inversion of the prime minister's stated hope when the AI opportunities action plan was published earlier this year.

The government disputes the claims, and highlights that the UK is the "third-largest AI market in the world" which is "totally at odds" with Kao's findings. Google today announced a multi-billion pound investment in the UK and AI.

Those in industry say that not enough has been done since AI opportunities action plan was published at the start of 2025, and the nine months that have since passed is a long time in the context of the sector. The report is calling for changes to give data centres access to cheaper energy, and a relaxing of copyright laws.

Without solid commitments by the end of the year, they warn that investment will instead head overseas. Kao has eight data centres either built or operating in the UK, and has invested more, including a £350m investment in Manchester.

Spencer Lamb, the managing director of Kao, said: "Unless fundamental issues around energy availability and pricing, AI copyright and funding AI developments are solved - and solved quickly - the UK will miss out on one of the most remarkable economic opportunities of our time, and ultimately risks becoming an international AI backwater." Industry sources say that for the UK to be competitive in the sector, projects need to be started as soon as possible to allow for a full ramping up of operations by 2030. For power, there have long been complaints in industry about the inability to access cheap energy provided by renewables.

Restrictions from the UK's creaking National Grid infrastructure have also raised significant concerns. The report warns the UK has some of the "highest energy prices in the world.