- High energy costs are forcing AI workloads out of the UK
- Cheaper electricity is becoming the deciding factor for AI deployment
- The US infrastructure advantage is accelerating the shift of AI workloads
British businesses are paying more than four times as much for electricity as their American counterparts, and the AI industry is taking notice.
According to CUDO Compute, 20% of UK firms have already moved AI workloads out of the country due to high power costs.
The gap between where businesses want to run AI and where they can actually run it is widening rapidly.
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Why British AI firms are looking overseas for cheaper power
“What we are seeing is a growing tension between where businesses want to run AI and where they actually can,” said Matt Hawkins, CEO of CUDO Compute.
“If it is cheaper or easier to run workloads elsewhere, they will move, regardless of sovereignty ambitions.”
A third of UK organisations say energy costs are limiting their ability to scale AI operations, according to the survey of over 700 senior AI decision-makers.
When asked which markets look most attractive for new AI cluster capacity, 72% of UK respondents pointed to the United States.
India followed at 62%, Eastern Europe at 58%, and China at 55%. Western Europe and the Nordics scored lower at 45% and 44%, respectively.
The message is clear: cost and performance still outweigh sovereignty for 43% of organisations when deciding where to deploy their AI tools.
While 46% of UK organisations say geopolitical instability is pushing them to keep workloads within home markets, the economic pressure to relocate is intense.
Nearly one in three UK firms say they are actively considering moving workloads overseas due to geopolitical pressures.
Almost half say data sovereignty, regulatory compliance, or national security concerns are shaping their AI deployment strategy.
Yet 32% of AI-first businesses say they would consider moving workloads overseas due to power costs, compared to 18% of traditional enterprises.
The businesses running the most compute-intensive workloads are also the most likely to look beyond the UK as economic conditions tighten.
The UK has ambitions and policies for AI sovereignty, but there is a clear disconnect between those goals and what is actually available.
Organisations want to build in the UK, but they need the infrastructure to do so. The countries that solve this first will shape the future of AI, and the UK still has a window to lead, but it needs to act quickly.
The research exposes a hard truth for British policymakers. Talk of AI sovereignty means nothing without the power infrastructure to support it.
The United States, with its lower energy prices and aggressive buildout of AI-ready data centres, is already reaping the benefits of the UK’s inaction.
Every week that passes without meaningful progress on energy costs and grid capacity, more British AI workloads will migrate overseas.
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