Data Centres Hold Britain Back, Says George Osborne

Data‑Centre Footprint: Water, Energy, and the Economy

Former Chancellor George Osborne, now an AI policy lead at OpenAI, has criticised the country’s reliance on large data‑centre projects. In a televised interview on 12 March, he argued that the scale of these facilities is draining water and energy resources, hindering the UK’s climate goals and economic competitiveness.

Osborne’s comments come amid a wave of public demonstrations across London, Manchester and Edinburgh, where residents and environmental groups have protested the construction of new data‑centre hubs. The government’s plan to expand digital infrastructure, backed by the Ministry of Business, Energy and Industrial Strategy, has faced scrutiny over its environmental footprint and the cost to taxpayers.

The new data‑centres, often dubbed „nimbys,” are designed to house thousands of servers that power cloud services and AI applications. However, each facility can consume up to 10 million litres of water per year for cooling, and its electricity demand can rival that of a small town. Osborne highlighted that the UK’s current water supply is already stretched, especially in regions like the West Midlands and the North East. He added that the high energy draw could push the nation toward fossil‑fuel generation, counteracting the 2050 net‑zero pledge.

Is the UK Losing Its Edge in Digital Innovation?

Economically, Osborne warned that the upfront investment—estimated at £2 billion per site—could divert funds from green infrastructure projects. He cited a study by the Centre for Energy Studies, which projected that redirecting just 5 % of the data‑centre budget to renewable projects could cut national emissions by 0.8 million tonnes of CO₂ annually.

Osborne questioned whether the UK’s ambition to become a global AI hub is being undermined by these massive facilities. „We are building a digital future that is literally thirsty and hungry for power,” he said. „If we cannot secure the resources to sustain it, we risk falling behind Silicon Valley and other tech leaders.”

What Are the Alternatives?

He pointed to the UK’s current data‑centre market share, which stands at 12 % of the global total, lagging behind the United States (30 %) and China (25 %). Osborne urged policymakers to incentivise smaller, modular data‑centres that use advanced cooling technologies and renewable energy sources. He also called for stricter environmental assessments before approving new sites.

OpenAI’s policy team, where Osborne serves as a liaison, has been exploring „edge computing” solutions that process data closer to the source, reducing the need for large central hubs. Osborne noted that edge nodes consume significantly less water and electricity, and can be powered by local solar or wind farms. He also mentioned the potential of „green data‑centres” that integrate heat‑recovery systems, turning server heat into district heating for nearby communities.

The government’s Digital Strategy Office has acknowledged these concerns, announcing a pilot program to retrofit existing data‑centres with water‑less cooling systems. Osborne welcomed the initiative but urged that it be scaled quickly to meet the projected demand for AI services.

The Road Ahead: Policy, Innovation, and Public Trust

If the UK fails to address the environmental and economic drawbacks of large data‑centres, it risks alienating both investors and citizens. Osborne warned that public backlash could delay critical digital infrastructure projects, stalling the nation’s AI ambitions. He called for a transparent dialogue between industry, government, and the public to ensure that the digital economy grows sustainably.

The upcoming parliamentary debate on the Digital Infrastructure Bill will likely feature Osborne’s arguments, as lawmakers weigh the trade‑offs between growth and stewardship. The outcome could shape the UK’s position in the global tech arena for decades.

Frequently Asked Questions

Q1: Why does Osborne focus on water usage in data‑centres? A1: Data‑centres use large volumes of water for cooling. In a country with limited water resources, this consumption can strain local supplies and conflict with environmental goals.

Q2: What alternatives does Osborne propose for large data‑centres? A2: He advocates for smaller, modular facilities, edge computing, and green data‑centres that use renewable energy and heat‑recovery systems.

Q3: How might this affect the UK’s AI industry? A3: If the UK cannot balance infrastructure needs with sustainability, it risks falling behind competitors, potentially reducing investment and job creation in the AI sector.