It’s a vision that has helped transform Greater Manchester into Europe’s fastest growing AI economy. But if that ambition is to be replicated nationally, there is one piece of infrastructure that must become central to the conversation: data centres.

Often overlooked, data centres are the foundation of the digital economy. They power essential cloud services businesses and individuals rely on every day, enable scientific research and, increasingly, provide the compute capacity required to train and deploy artificial intelligence.

Simply put, there is no AI economy without digital infrastructure.

If the UK is serious about becoming a global AI leader rather than simply just a consumer of technologies developed elsewhere, it must create the conditions for investment in the infrastructure that makes generative AI deployments possible. 

Where digital infrastructure is built, economic growth follows. Data centres create highly skilled jobs, support local supply chains, attract technology businesses and provide the capacity that enables wider investment into towns and cities. They are long-term assets that contribute to the local economy they reside within and help anchor regional technology ecosystems, giving businesses the confidence to invest and grow.

This is exactly the type of infrastructure that can help turn the ambition of good growth in every postcode into a reality.

The UK already has many of the ingredients needed to become a global AI powerhouse: world-leading universities, an innovative technology sector and a thriving research community. However, we also face structural barriers that risk pushing investment to more competitive markets.

From Kao Data’s perspective, there are three priorities Government must address if it wants to unlock the full economic potential of AI and the digital infrastructure that supports it.

First, reduce the UK’s uncompetitive energy costs.

The UK continues to have the highest industrial electricity prices in the G7. For data centres, where electricity is the largest operating cost, this represents a significant barrier to investment.

International investors compare opportunities on global scale. Reforming electricity levies and reducing the cost of power would make the UK a far more attractive destination for AI infrastructure, while strengthening the competitiveness of UK industry more broadly.

Second, accelerate planning and improve access to power.

Demand for AI infrastructure is growing at an unprecedented pace yet planning processes and grid connection times are often unable to keep up.

Faster planning decisions, combined with a more efficient process for securing grid connections, would enable developers to deliver the digital infrastructure needed to support AI growth while unlocking billions of pounds of private investment into communities across the country.

If Government wants to stimulate regional growth, it must ensure critical infrastructure can be delivered at the speed the economy requires.

Finally, provide clarity on AI copyright policy.

Businesses need confidence before making long-term investment decisions. The UK has an opportunity to establish a globally competitive copyright framework that supports AI training at scale. 

Clear, balanced policy that has parity with EU legislation, would encourage innovation, attract international investment and reinforce the UK’s position as a destination for AI development.