Insights from London Tech Week

UK doubles down on digital infrastructure with £1bn funding boost

Alex Speedie

June 17, 2025

“If we are to realise a truly digital future, we must first secure the infrastructure to support it.”

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With that statement, the UK government announced a further £1bn in funding to scale up digital infrastructure, particularly in hardware. The commitment was underscored by the presence of Jensen Huang, co-founder and chief executive of Nvidia, during the opening remarks. Huang noted that the UK now represents the largest AI ecosystem outside of the US and China, a status further reinforced by Nvidia’s decision to partner with the government in launching the UK Sovereign AI Industry Forum. The initiative will convene a consortium of leading UK firms tasked with developing and deploying AI infrastructure to support the country's digital economy and bolster national security.

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Notably, the emergence of Deepseek, an AI firm capable of delivering comparable performance to US counterparts while operating with markedly reduced hardware, has sparked optimism around the UK’s potential to compete effectively without requiring the same scale of infrastructure investment.

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Yet a growing challenge looms: energy demand.

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Data centres worldwide are consuming rising volumes of electricity. In 2022, global consumption stood at 460 terawatt hours. The International Energy Agency forecasts this figure could double to 1,000 terawatt hours by 2026, equivalent to the entire electricity consumption of Japan, a nation of 125 million people. In the UK, data centres currently account for around 1 per cent of national electricity use. By 2030, that share could reach 6 per cent. In real terms, this implies a leap from 4,800 gigawatt hours in 2024 to 19,600 gigawatt hours by the end of the decade. Without a coherent national strategy on electricity generation, the UK's aspirations to expand its data infrastructure risk outpacing its energy capacity.

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Nevertheless, the UK continues to distinguish itself in financial innovation and venture investment. Platforms such as Funding Circle have played a pivotal role in launching early-stage businesses, while London’s enduring appeal to global investors ensures the city remains a magnet for capital and talent and initiatives such as PISCES should add to London’s position.

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In the meantime, several key initiatives are under development:

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Regulatory technology: streamlining compliance and risk functions through automation
International real-time payments: removing the lag from cross-border transactions
Pay by bank: disrupting card-based payments across both e-commerce and physical retail
Digital currency: exploring the viability of a UK-issued stablecoin and what would be required to make it succeed

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Meanwhile, so-called agentic AI is beginning to reshape the startup landscape. The ability to prompt AI systems to write code and rapidly prototype products means that minimum viable products can now be built with a fraction of the resources once required. In effect, AI is lowering barriers to entry for entrepreneurs and potentially serving as a great equaliser, both within the UK and globally. What this means is that innovation should also now accelerate. Whilst there are valid concerns about how AI has the potential to cause disruption, specifically in regards to job automation, the key point is that opportunities are abundant for those looking to seize them.

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For those within this ecosystem, it is a moment of both privilege and responsibility. Here’s to the remainder of 2025 and beyond!

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