Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Revealed: UK's multibillion AI drive is built on 'phantom investments'

theguardian.com

Post reply on HN
Print view View original

31–40 of 57 posts

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#31

Post by elmomle »

maest wrote: post #23
CrzyLngPwd wrote: post #16

The current government, like the last one, are just a front for funnelling income tax from the poor to the rich, and of course doing whatever the Epstein Regime wants them to do. But yeah, we need a power-hungry datacenter more than we need proper sewerage, proper water management investment, shorter hospital wait times, decent border patrol, or some of the fucking potholes fixed! Still, it makes a change to just giv…

> just a front for funnelling income tax from the poor to the rich, I don't know about all the other accusations you make, but this one is pretty off the mark, considering this has been the most unpopular government amongst the rich in a while. I mean, it's Labour, what did you expect?

Yeah, parent post to yours is sensationalist astroturf garbage. Russian troll accounts call Zelenskyy a NarcoFührer.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#32

Post by bombcar »

embedding-shape wrote: post #18
bombcar wrote: post #15

Earlier quoted context omitted.

The "blockchain" collapse was covered up by the AI explosion, many of the NFT/blockchain things that would have died out pivoted to be AI (or AI on the blockchain!).

> many of the NFT/blockchain things that would have died out pivoted to be AI (or AI on the blockchain!). I'm guessing you're talking about smaller projects? AFAIK, neither Bitcoin nor Ethereum have anything to do with AI, and combined they're 1.5T USD in market cap, that's not propped up by AI, is it?

Yes - the scam/hype around crypto was always on the "application" of it (or shitcoins) - BTC and ETH have just chugged along as they actually have an underlying use case.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#33

Post by varispeed »

These "investments" are rubbish. Show either deliberate misunderstanding how economy works or incompetence. If someone invests £100bn, what do you think they expect? The money to vanish or getting nice return? Yes, the scraps will go to interim workers, but at least £200bn will be sucked out of the UK economy back to investors, likely not willing to pay taxes.

If UK government wanted to properly invest in the AI, they would be developing chip fabs and embedding themselves in the supply chains.

It's a perfect time to build DDR5 factory, if GPUs are too large undertaking.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#34

Post by varispeed »

mrwh wrote: post #8

The UK has been chronically bad at providing jobs and training for its young people. I saw that 20 years ago when I was there. That is a key reason, perhaps the primary reason, for its long term productivity malaise. And the response is to lean into a technology that will make this situation profoundly worse? It's another lazy quick fix that is neither quick nor a real fix. The UK needs to invest in its people, not f…

Training is one thing, but wage compression is another. Why study for many years, miss out on life if you can get warehouse job with little training and you won't be meaningfully worse off? You get smaller flat, less organic food and a car few years older than your engineer peer. These talks about productivity always miss the elephant in the room - why people bother to show up in the first place? It's the money. If there is no money, then you can lead horse to water...

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#35

Post by nitwit005 »

slavoingilizov wrote: post #27
mrwh wrote: post #8

The UK has been chronically bad at providing jobs and training for its young people. I saw that 20 years ago when I was there. That is a key reason, perhaps the primary reason, for its long term productivity malaise. And the response is to lean into a technology that will make this situation profoundly worse? It's another lazy quick fix that is neither quick nor a real fix. The UK needs to invest in its people, not f…

The UK has 3 of the top 10 universities in the world: https://www.timeshighereducation.com/world-university-rankin... It's a talent pool that many big employers want to tap into across a range of skills and industries. Cambridge is the best place to do bio-science and research. That is largely because the UK provides training and opportunities to its young people. "I saw that 20 years go" is one data point that ignor…

The people who aren't graduates of those universities also matter.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#36

Post by varispeed »

slavoingilizov wrote: post #27
mrwh wrote: post #8

The UK has been chronically bad at providing jobs and training for its young people. I saw that 20 years ago when I was there. That is a key reason, perhaps the primary reason, for its long term productivity malaise. And the response is to lean into a technology that will make this situation profoundly worse? It's another lazy quick fix that is neither quick nor a real fix. The UK needs to invest in its people, not f…

The UK has 3 of the top 10 universities in the world: https://www.timeshighereducation.com/world-university-rankin... It's a talent pool that many big employers want to tap into across a range of skills and industries. Cambridge is the best place to do bio-science and research. That is largely because the UK provides training and opportunities to its young people. "I saw that 20 years go" is one data point that ignor…

These rankings are meaningless. If you actually studied in the UK, you'd notice a massive change in the last 5 years. Universities do not teach anymore (perhaps with a few exceptions), they are facilitating visas for foreign students without any expectation they'll be learning anything and nobody cares. They pass the exams barely attending any lectures. Everyone is happy, except home students who get massive debt and no actual useful skills.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#37

Post by jdasdf »

varispeed wrote: post #33

These "investments" are rubbish. Show either deliberate misunderstanding how economy works or incompetence. If someone invests £100bn, what do you think they expect? The money to vanish or getting nice return? Yes, the scraps will go to interim workers, but at least £200bn will be sucked out of the UK economy back to investors, likely not willing to pay taxes. If UK government wanted to properly invest in the AI, the…

>but at least £200bn will be sucked out of the UK economy back to investors

That's not how the economy works... Nothing gets "sucked out of the economy", and certainly not a productive investment that generated that income.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#38

Post by katdork »

varispeed wrote: post #36
slavoingilizov wrote: post #27

Earlier quoted context omitted.

The UK has 3 of the top 10 universities in the world: https://www.timeshighereducation.com/world-university-rankin... It's a talent pool that many big employers want to tap into across a range of skills and industries. Cambridge is the best place to do bio-science and research. That is largely because the UK provides training and opportunities to its young people. "I saw that 20 years go" is one data point that ignor…

These rankings are meaningless. If you actually studied in the UK, you'd notice a massive change in the last 5 years. Universities do not teach anymore (perhaps with a few exceptions), they are facilitating visas for foreign students without any expectation they'll be learning anything and nobody cares. They pass the exams barely attending any lectures. Everyone is happy, except home students who get massive debt and…

It's actually more like the past 10 years? (Certainly was when I was in university back 8 years ago) Maybe longer.

But, I like to reference https://marktarver.com/professor.html on the state of education in the UK.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#39

Post by varispeed »

jdasdf wrote: post #37
varispeed wrote: post #33

These "investments" are rubbish. Show either deliberate misunderstanding how economy works or incompetence. If someone invests £100bn, what do you think they expect? The money to vanish or getting nice return? Yes, the scraps will go to interim workers, but at least £200bn will be sucked out of the UK economy back to investors, likely not willing to pay taxes. If UK government wanted to properly invest in the AI, the…

>but at least £200bn will be sucked out of the UK economy back to investors That's not how the economy works... Nothing gets "sucked out of the economy", and certainly not a productive investment that generated that income.

The distinction you're missing is between economic activity and wealth retention. Foreign investment in UK data centres generates GDP (construction jobs, some ops roles) but the productive capital and its returns accrue to foreign shareholders. This is the classic GDP vs GNI gap - Ireland is the textbook example, enormous GDP inflated by multinationals, but GNI per capita significantly lower because profits repatriate.

If a fund invests £100bn expecting 15-20% IRR, they're extracting multiples of that over the asset lifetime. That's the whole point - they're not philanthropists. The UK tax take is thin because these structures are explicitly designed for tax efficiency.

The deeper issue is where in the value chain the UK is positioning itself. Hosting someone else's compute is the low-margin end - it's being a warehouse. The high-margin positions are fabrication and supply chain. Taiwan, South Korea, and now the US via CHIPS Act understand this. They're not inviting hyperscalers to build data centres and calling it industrial strategy - they're building domestic fab capacity because that's where durable value and strategic leverage sit.

The UK is offering itself as a site rather than building itself as a participant. Those are very different things.

Re: Revealed: UK's multibillion AI drive is built on 'phantom investments'

#40

Post by nickdothutton »

These big headline "UK investments" are always and without exception not what you might think they are. When you drill into them, which companies, what was bought, where was the profit realised, what actual _real_ R&D was funded? They balloons are easy to burst. No need to even get as far down the funnel as what products/services were brought to market, what was their adoption, and what shareholder value was created. I have seen almost 30 years of it now.

Partly it's because politicians think every dollar (pound) "invested" is the same, whether it goes on bricks and mortar or silicon or software.

UK has some of the highest priced electricity for industrial use on the planet. A result of deliberate policy choices. Who in their right mind would want to grow a vast datacentre estate there?

Post reply on HN