A multibillion-pound drive to “mainline AI into the veins” of the British financial system is riddled with “phantom investments” and shaky accounting, a Guardian investigation has discovered.
Since 2024, successive Conservative and Labour governments have proclaimed large offers to construct new datacentres, create 1000’s of jobs and assemble a supercomputer.
The investments – led by two companies linked to AI big Nvidia – have been touted as a cornerstone of the federal government’s promise to make use of tech to turbocharge the financial system.
On Monday, former UK deputy prime minister Sir Nick Clegg and former Meta chief working officer Sheryl Sandberg have been introduced as new board members at one of many companies, NScale. Nscale additionally stated it had raised a $2bn funding spherical, sending its valuation hovering to $14.6bn.
However a Guardian investigation has proven the cash isn’t essentially actual, the datacentres might not be new, the roles are unaccounted for – and the supercomputer web site 12 miles north of London remains to be a scaffolding yard.
When requested a couple of sequence of claimed investments, the UK’s Division for Science, Innovation and Expertise declined to reply detailed questions however stated it “rejected these assertions”.
A press release added: “Our AI sector has attracted greater than £100bn in non-public funding for the reason that authorities took workplace, with our AI sector rising 23 instances sooner than the broader financial system final yr. That’s delivering the roles and alternatives hardworking folks deserve.”
However it additionally acknowledged limitations to its oversight.
In a single case, it stated that there was no contract in place for a £1.9bn ($2.5bn) funding regardless of a press launch declaring that one had been signed. In one other, it stated that it was “not enjoying an lively position in auditing these commitments”.
The findings increase questions on a sequence of large AI investments introduced globally previously yr, many in high-level press releases from governments and tech firms.
With over £500bn promised in 2025, nations worldwide are searching for to conjure financial development from AI’s transformative potential.
Final yr, the UK prime minister, Keir Starmer, stated that if AI have been “absolutely embraced”, it may convey £47bn to the financial system annually – and promised to “mainline AI into the veins of the UK”.
However the UK instance will increase fears that, with out oversight, the worth of those investments could merely enrich firms and traders which are largely headquartered within the US.
“These are phantom investments,” stated Cecilia Rikap, a professor of economics at College Faculty London, who stated comparable issues have been taking place all over the world.
“Large tech firms artificially inflate datacentres’ job creation and financial affect to please governments just like the British one, that are determined to assert they’re making the financial system develop.”
‘The foundations are very versatile’
The UK authorities’s AI plans centre on two firms backed by the $4tn tech big Nvidia: London-based Nscale and the US firm CoreWeave.
In 2024, Rishi Sunak’s authorities hailed one of many first AI investments in Britain, a £1bn dedication from CoreWeave to assist “cement the UK’s place as a world chief in AI.”
CoreWeave’s press launch stated it might make investments £1bn within the UK, and quoted the then know-how secretary, Michelle Donelan, as saying this is able to convey “two new datacentres to our shores.”
CoreWeave stated the funding would “create job alternatives” and herald additional enlargement. Six months later, it introduced that the 2 datacentres have been operational: one in London Docklands, and one in Crawley close to Gatwick.
Planning data point out that CoreWeave constructed no new datacentres at both location throughout that point interval. Neither did the 2 companions talked about in its press launch.
The truth is, whereas CoreWeave’s – and the federal government’s – communications suggest that bodily buildings have been constructed by suggesting the funding would convey “two new knowledge centres to our shores”, this was deceptive.
The Guardian understands that CoreWeave turned a buyer of two current datacentres, one in-built 2002 and one in-built 2015, each of which lease house to a number of different firms, together with Google and Fujitsu. CoreWeave rented house in these datacentres, and deployed Nvidia chips that it had paid for.
Successfully, its funding quantities to the relocation into the UK of laptop chips manufactured in Taiwan by a US firm.
There isn’t any indication in public-facing supplies that CoreWeave has made different investments, past renting an workplace in a constructing in Southwark, London, which it has referred to as its “European headquarters.”
Rikap stated it was “quite common” for datacentre builders to border the acquisition of apparatus, or the acquisition of different firms, as funding. “The foundations are very versatile and assist them to make these large claims and investments {that a} authorities like Starmer’s, which is determined for excellent news, can use for his or her favour.”
In a response to a question from the Guardian, the federal government stated that the figures it had introduced for CoreWeave’s funding didn’t come from them. A assertion stated they have been produced by CoreWeave.
It didn’t say whether or not this funding amounted to capital or gear.
CoreWeave stated that bringing new datacentre capability on-line by deploying chips inside an current web site was an “industry-standard” strategy. The deployment of those chips, the related lease and energy prices, the opening of its workplace and personnel prices represented the entire of the £1bn funding, it stated.
“Our investments are designed to increase compute capability, and allow AI adoption and innovation throughout enterprises, analysis establishments, the general public sector and startups. We’re delivering superior, purpose-built AI infrastructure to assist the event of AI at scale,” the corporate stated. It refused to say what number of jobs had been created.
Nscale’s flagship mission was introduced in January 2025, when the federal government stated that the corporate would construct a supercomputer web site on the outskirts of Loughton in east London, a mission dubbed “the biggest UK sovereign AI datacentre.” This was reported to be a part of a $2.5bn funding the corporate was making into the UK.
That press launch stated that Nscale had “signed a contract” to finish this datacentre by 2026.
Nscale’s personal press launch from the time stated that it “confirmed” its funding within the UK by shopping for the positioning in Loughton, and the supercomputer was to be “reside” by This fall 2026.
However the proposed web site, in an industrial park on the outskirts of Loughton, was nonetheless getting used as a scaffolding yard by a London-based firm when the Guardian visited in February.
Nscale submitted a planning software to construct there on the finish of February, after the Guardian had begun to make inquiries. Land data seem to point that Nscale has not but been registered as proprietor of the positioning. Nscale couldn’t say whether or not the corporate owned the land, and couldn’t give a date on which any buy had occurred.
In response to a question from the Guardian, the federal government stated that the determine Nscale had given for its funding within the UK, $2.5bn, was from Nscale itself.
Requested concerning the phrases of the contract that Nscale had signed to construct the supercomputer by the tip of this yr, the federal government didn’t reply instantly. As an alternative, it stated that Nscale’s total $2.5bn funding was “not a proper contract, reasonably an intention to commit capital”, and “could nicely embrace gear and capital funding”.
Nscale’s accounts for 2025 are overdue, however don’t but present any dedication to investments within the UK.
An Nscale spokesperson stated: “As a UK-headquarted firm, we stay dedicated to the UK funding we introduced – with the Loughton mission in assist of Microsoft progressing as we envisaged. We’re investing not solely within the web site itself but additionally in offsite energy infrastructure, native contractors and native suppliers.”
‘The claims are pie-in-the-sky’
Nscale and CoreWeave are dedicated to additional tasks.
Nscale, together with Microsoft and the ChatGPT developer, OpenAI, are to determine Stargate UK, a “important” mission to assist develop the UK’s personal AI amenities on websites throughout the nation.
In response to a question from the Guardian, the federal government stated that this mission was additionally part of Nscale’s $2.5bn funding. It didn’t give a breakdown of the whole quantity, and stated it didn’t have a mechanism in place to overview it.
“Authorities will proceed to work intently with Nscale in securing this funding into UK, nonetheless, it’s not enjoying an lively position in auditing these commitments,” stated a spokesperson for the Division for Science, Innovation and Expertise.
CoreWeave, in the meantime, is to again an AI development zone in Lanarkshire, which the federal government has stated might be accomplished inside 4 years and convey the corporate’s funding into UK infrastructure to £2.5bn. That improvement is a “key pillar” of the federal government’s industrial technique. The federal government says the mission will create 3,400 jobs within the development of the ability; CoreWeave’s associate, DataVita, has promised greater than 1GW of onsite renewable vitality, the vitality equal of the output of a nuclear energy station.
The Lanarkshire web site at the moment hosts a datacentre with 24MW of electrical energy – lower than 3% of the promised renewable provide – operated by the Scottish agency DataVita, which is partnering with CoreWeave in creating the positioning. One planning software, to increase this to 40MW, has been authorized; different functions, together with for a bigger web site, can’t be filed till April, based on the planning portal of the native council.
“This hyperscale datacentre would have the vitality demand of half 1,000,000 houses, an eighth of the whole Scottish electrical energy demand,” stated Dr Kat Jones, director of the Scottish countryside charity APRS, who has been researching the expansion of hyperscale and AI datacentres throughout Scotland.
She stated that the claimed plans for 1GW of on-site renewable vitality “are whole pie-in-the-sky. The place is that this going to return from?”
Within the press launch saying the positioning, the federal government stated that CoreWeave’s dedication to the positioning was a part of a bundle of investments the corporate “has made to AI tasks within the UK.”
In response to a question from the Guardian, the Division for Science, Innovation and Expertise wouldn’t say if it had audited this dedication, or how – or if any of the funding had been acquired. Questions on the type of the funding, it stated, have been “in the end” as much as CoreWeave.
“The small print of the Lanarkshire dedication are topic to DataVita and CoreWeave,” it stated.
Requested concerning the Lanarkshire web site, CoreWeave stated that questions on its energy utilization ought to be directed to DataVita, its associate, and that the mission “stays on schedule, with the primary section anticipated to return on-line later this yr.”
DataVita didn’t reply to a request for touch upon this piece.
Requested concerning the 3,400 jobs, CoreWeave stated: “Any job projections which have been shared in relation to those UK datacentre efforts have originated from the UK Authorities and DataVita, not CoreWeave.”
A authorities spokesperson stated: “Datacentres are very important to delivering the advantages of AI, from boosting productiveness to enhancing public providers. We’ve a transparent plan to ship the infrastructure the UK wants and get it linked, and make no apologies for working with main world companies to spend money on and construct datacentres right here.”
Further reporting: Dan Milmo and Libby Brooks
