Britain must build its own computing power or risk becoming an AI colony

As technologies like AI define progress in the 21st century, countries with the infrastructure to process vast data volumes will retain control of innovation. Today, that’s largely the US, China, and Taiwan.

For these countries, computing power is redetermining economic trajectories. Nvidia, for example, has transformed the US’s AI industry into a major export.

Huawei helps China project influence across emerging markets. In Taiwan, 25% of the economy is driven by TSMC - its ‘silicon shield’.

So, what about the UK? Well, despite world-class research at four of the world’s top ten universities, Britain remains an infrastructure ‘renter’.

It accounts for under 3% of the world’s total computing power, and very little of that is domestic intellectual property (IP). Simply put, the UK is allowing its progress to be controlled by other countries.

Keir Starmer proclaimed at London Tech Week that the UK needs to become an ‘AI maker, not an AI taker.’ He’s right - it would give the UK greater control over its technological and economic future. But to do that, it must support home-grown computing companies that can make it happen.

Britain already has the ideas and the talent. Universities are global leaders in breakthrough innovation, and AlbionVC research shows investment in UK compute startups jumped from £3m in 2015 to £284m in 2024. The challenge now is to keep more of that value here, with government acting as an anchor customer to spur revenue.

This doesn’t mean bringing all fabrication onshore immediately. Fabrication is expensive and geographically sensitive, and working with foreign companies remains beneficial.

But by controlling even 10% of critical IP, the UK gains a fallback and the ability to call more of the shots rather than relying entirely on foreign suppliers.

To achieve this, the government should consider a UK-owned data centre based on domestic IP and commit to buying from it. Acting as the first customer supports startups beyond cash, providing reference points that give investors and corporate customers confidence.

The centre could also link to the AI Research Resource so startups and universities can test and develop new technologies. The goal is a market that rewards UK IP for quality, not just origin.

This issue is urgent. A potential 100% tariff on semiconductors from the US looms, and whatever deal the government negotiates, Britain cannot ignore the message: computing power is essential national infrastructure and must not be subject to other countries’ political whims.

Even OpenAI, which helped launch the global AI boom, recently struck a deal with AMD to reduce reliance on Nvidia. If the world’s leading AI company sees the need to diversify, so should the UK.

Britain should welcome global investment, but ensure that some capital builds UK infrastructure. The prize isn’t just resilience; it’s a new economic engine with defensible IP, exportable hardware, and real influence. It’s Britain’s chance to be a maker - not a taker - of the future.

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Dave Grimm is a Partner at AlbionVC

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