Prosperity Deal
Prosperity Deal
The UK/US Tech Prosperity Deal
AI is already wreaking havoc on global power systems
The UK Government has unveiled an agreement with the United States—worth around £150 billion—known as the “Tech Prosperity Deal.”
Under this pact, the two nations will collaborate in key technology areas such as artificial intelligence (AI), quantum computing, and nuclear energy. The initiative is expected to generate roughly 7,600 new jobs across the UK.
Some of the world’s most prominent tech companies are involved, including Nvidia, OpenAI, Alphabet (Google), and Microsoft.
Financial commitments
Of the total investment, around £90 billion will be provided by the US investment giant Blackstone over the next ten years. However, specific spending plans remain under discussion.
Microsoft has described its contribution—valued at £22 billion—as the “single biggest announcement” under the agreement. The company’s investment will support its UK operations over the next four years. Focusing on AI infrastructure as well as ongoing business activities.
AI growth zones
As part of the package, Microsoft has committed to support an AI datacentre project in Loughton, Essex operated by the UK-based infrastructure firm Nscale, by becoming one of its principal clients.
Meanwhile, the north-east of England is set to become an AI “growth zone”. Referencing an area receiving special planning and energy support to accommodate new data centres and related facilities.
Nvidia, the leading AI chip manufacturer, has pledged £11 billion in UK investment. This includes supplying up to 120,000 Blackwell graphics processing units (GPUs) for data centre projects expected to emerge over the next few years. This contribution overlaps with several other initiatives within the broader deal.
The Energy Challenge of AI
However, alongside these optimistic announcements lies a significant challenge. The AI industry is driven by three essential inputs: computing chips, data, and electricity. This demands enormous amounts of power to operate its data centres.
According to the International Energy Agency (IEA), the global electricity use of data centres could more than double by 2030. Potentially reaching around 945 terawatt-hours per year—a figure roughly equivalent to Japan’s total annual consumption.
A key factor shaping the expansion of new facilities is known as “speed-to-power”. This refers to the time it takes for a potential data centre location to gain access to an adequate electricity supply.
Turning to Nuclear Power
Meeting this growing energy demand raises pressing questions about the roles of coal, gas, renewables, and nuclear power.
Renewable sources such as wind and solar continue to expand. However, they often struggle to deliver the constant baseload power needed to support large-scale AI operations.
Recognising this, the UK government has identified nuclear energy as the most reliable solution. As the best option to provide stable, low-carbon electricity for emerging AI infrastructure.
This approach aligns with Prime Minister Starmer’s long-term plan for a major expansion of nuclear capacity. Including the use of small modular reactors (SMRs) to power data centres.
A notable example is an £8.21 billion project led by Holtec, EDF Energy, and Tritax. This will redevelop the former Cottam coal power site in Nottinghamshire into a hub for data centres powered by SMRs. This marks one of the UK’s first major efforts specifically designed to meet the AI sector’s energy needs.
Picture (right): EDF
Looking Ahead
The government argues that the Tech Prosperity Deal will “turbocharge” the UK’s low-carbon economy, ensuring that clean energy growth keeps pace with the rapid expansion of AI technologies.
To remain within its net zero targets, the UK must expand its low-carbon energy supply fast enough to power both new datacentres and the wider economy—without relying on additional gas generation.
Global tech firms are also turning toward nuclear energy to meet their sustainability commitments. Meta recently signed a 20-year agreement with a nuclear plant in Illinois, while Amazon and Google are investing heavily in nuclear-powered operations to secure their AI ambitions.
However, these plans raise further concerns about water usage, as many AI data centres depend on large quantities of water for cooling—a growing issue amid the UK’s already stressed water resources.
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