AI plan unveiled after council bans data centres – Daily Business

Kate Forbes will unveil the AI report (pic: Terry Murden / DB Media Services)

A plan to turn Scotland into a leader in artificial intelligence will be unveiled today just a day after Edinburgh City Council voted for a temporary ban on data centres.

Independent analysis forecasts that AI could contribute £23 billion a year to the Scottish economy by 2035.

Deputy First Minister Kate Forbes will tell an invited audience at Edinburgh Futures Institute that nearly 300 AI-focussed companies are already operating in the country.

However, the city council yesterday backed a motion from the Green group of councillors calling for a moratorium on data centre development until the Scottish Government issues clear guidance on what defines a green data centre.

The decision comes after campaigners raised concerns over the environmental impact of AI data centres and a lack of a clear regulatory definition.

It follows an application for a proposed data centre in Edinburgh that was rejected on the grounds that it didn’t constitute a ‘green’ data centre and went against Edinburgh’s City Plan which sets out how land should be used. 

The Scottish Government says that to be considered a green data centre, planning authorities “may wish to consider criteria such as the extent to which the data centre is powered from renewable energy sources; makes use of energy efficient technologies; seeks to minimise water consumption; and supports the re-use of excess heat.”

This has prompted concerns that developers can achieve green status by implementing smaller-scale sustainable technology, such as energy-efficient lighting or water-efficient toilets, while still producing a large carbon footprint.

In a statement to the media ahead of last night’s vote, Green councillor Alys Mumford, who brought the motion, said: “We know that Edinburgh residents are really worried around the impact that data centres could have on our communities and our climate. 

“The Scottish Government has said that so-called ‘green’ data centres are vital for our national infrastructure but have failed to provide any definition of what green actually means, despite repeated requests. Without this, developers are free to make claims about their environmental credentials with nothing to judge them against. 

“In the face of the climate and nature emergencies, and the growing understanding of the huge energy and water consumption required by AI, it is right that Edinburgh agrees to have a moratorium on any data centres until we can be reassured that they are more than simply green by name.”

The call for a moratorium has been supported by the campaign group Action to Protect Rural Scotland. In a written deputation to the council, the director Dr Kat Jones said: “APRS are pushing the Scottish Government to urgently produce a well-considered, meaningful and rigorous definition of a green data centre, with accompanying guidance for local authority planners and decision makers. 

“Our view is that this definition would need to be properly consulted on, because of the importance of getting this right due to the vast environmental impacts of hyperscale data centres, as well as the impacts they would have on the grid, electricity prices, local countryside and communities, as well as our climate targets.”

The Scottish Government’s new five-year AI Strategy will focus on “harnessing  the economic potential of the technology, helping ensure all people and businesses can benefit from it”.

Business Minister Richard Lochhead said: “AI is advancing faster than any technology we have ever seen and Scottish universities and businesses are at the forefront of the incredible services and products it is generating.

“Almost 300 AI‑focused companies now operate in the country – many of them home-grown, university spinouts. They are growing fast, exporting products, attracting investment and competing internationally.

“Global companies are meanwhile investing is our skills and expertise which is a major signal of confidence and tells the world that Scotland is a serious player in the development of AI as a force for good.

“We must continue this progress and successes already secured into further companies, jobs and investment. The Scottish Government’s new AI Strategy for Scotland will chart a course to ensure the benefits of AI reach people, communities and businesses across every part of our country.”

Sandy Begbie, chief executitve of Scottish Financial Enterprise, recently claimed that the opposition to data centres would send the wrong signals to the investment community.

AI is also seen as a risk to jobs, with HSBC the latest to warn of the impact it could have on the workforce. It could shed 20,000 jobs globally over the next three to five years as it harnesses AI to streamline many of its administrative functions.

The bank’s chief executive, Georges Elhedery, is weighing up how the use of AI could reduce the need for people in back and middle-office roles, according to Bloomberg. It said the cull could affect 10% of the bank’s global workforce of 210,000.

HSBC has about 34,700 people working in the UK, suggesting around 3,500 possible job cuts if Britain were to bear a proportionate hit.

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