By Joe Checkley, Fourth Year, Economics and Finance
A recent report from Microsoft found 80 per cent of Fortune 500 companies are currently utilising active AI agents–tools akin to digital employees which can act autonomously to complete complex tasks. The public sector is likewise undergoing AI driven evolution, with the UK Department for Science, Innovation and Technology (DSIT) signing a Memorandum of Understanding with OpenAI in July of 2025 proclaiming, ‘OpenAI and DSIT will collaborate to identify opportunities for how advanced AI models can be deployed throughout government […] to help civil servants work more efficiently.’ And recent research from Higher Education Policy Institute suggests student life is non-immune, with 88 per cent of students now utilising AI for assessments.
History offers a familiar pattern: the invention of the tractor liberated vast numbers of labourers from the drudgery of agricultural toil; the invention of the personal computer freed swathes of bean counters from the tedium of hand crafting spreadsheets; and AI, it seems, will free university students from the burdens of essay writing, perhaps affording them more time in the pub.
Though among the many promised positives, there lies a battery of issues to be hashed out–ranging from the existential (AI taking over the world and killing all humans) to the philosophical (the dilution of human originality). This article seeks to dissect what is perhaps the most immediate and tangible of these
AI systems depend on data centres as the physical substrate that supplies the vast computational power required to train large-scale models and run them in real time as users type up queries. Peruse any data centre planning application and fears over power and water demands are usually front and centre. On the power side, the most pervasive issue is carbon emissions. Self-described ‘tech justice’ non-profit Foxglove estimates a one GW (gigawatt) data centre recently approved in North Lincolnshire could generate carbon emissions equivalent to all of the UK’s annual internal flights—approximately one million tonnes. And with nationwide data centre capacity set to increase by three GWs in the next three years, there could be millions more tonnes on the horizon.
Despite the starkness of the numbers, this would likely equate to a less than one per cent increase in emissions upon the nation's 2024 total carbon emissions, which stood at 371 million tonnes. Additionally, the estimated carbon impact assumes an identical power grid in 2030 to today’s. The UK government is targeting a 95 per cent clean energy grid by 2030 (up from around 50 per cent currently), which if achieved, would materially reduce data centre’s carbon emissions. The environmental fallout of UK data centres therefore appears to hinge on two factors: the government’s ability to see off less environmentally friendly regimes, and its willingness to stomach higher energy bills in pursuit of a decarbonised grid.
On the water side, significant concern stems from fears of additional pressure on already strained potable water supplies. According to the Water Research Centre (WRC), current water usage by UK data centres is estimated to be 1.879 billion litres per year, or 0.2 per cent of the non-household market. WRC attribute the insignificant water usage to the UK data centre landscape being ‘significantly different from other jurisdictions, notably the United States, where evaporative water cooling (such as using cooling towers) is commonplace.’ Evaporative cooling dissipates heat by allowing water to evaporate into the atmosphere, thereby consuming it in the process. This contrasts with the popularised closed loop cooling systems most common in the UK where water is continually recycled, requiring negligible topups once running. Despite the low usage, UK water resources are under such pressure that water companies have been pushing back on new data centre developments for fear of running dry, including at the Lincolnshire proposal where Anglican Water aired objections. Data centre proponents are quick to point out that the UK loses around 1 trillion litres of potable water per year to leaky pipes, concluding efforts to safeguard water supplies would be better expended on pipe maintenance rather than data centre prohibitions.
A key piece to the data centre puzzle is what happens if data centre applications are rejected. Many environmental and political groups operate on the basis that every proposal which is denied equates to the less water and energy demands on the planet. Political and business leaders tend to think otherwise. American businessman David Friedberg recently argued on the All-In Podcast—which he co-hosts with US government official David Sachs among others— that ‘it's silly to think that we need to put a moratorium on datacentres. As soon as you do that, the companies that use datacentres are not going to slow down. They're going to go put them somewhere else, and we're going to miss out.’ The UK is among the most environmentally progressive nations on earth, ranking 5th on the New Climate Institute’s 2026 Climate Change Performance Index. If Friedberg’s sentiments are correct, the most environmentally friendly course of action may be ensuring data centres are built in the UK, as opposed to forcing them offshore.
The data centre buildout also bears meaningful implications for employment and the economy. The aforementioned Lincolnshire project promises 900 to 1,200 highly skilled long‑term roles once completed, while the government has eagerly echoed claims that a large project in Northumberland by private equity firm Blackstone will create around 4,000 jobs. It must be noted that these job estimates usually come from the developers themselves, and are consequently suspected to be dubious by many. Data centres also generate substantial revenue for the public coffers via business rates. One large data centre project in North London, approved last year, was underpinned by explicit projections of its fiscal impact, with an estimated annual business rates contribution of £21.4 million once the facility becomes operational. As satisfaction with public services in Britain hovers around historically low levels, this extra revenue is much needed.problems: data centres.
In summation then, how should we students feel about the tirade of technology giants smacking down data centres across the nation. We are the ones, after all, who will bear the consequences of environmental degradation more than any others, being at the very beginning of our lives on this planet. The question we must ask ourselves is how much carbon we are willing to emit, and how much water we are willing to consume in exchange for more jobs and greater tax revenue. Provided the environmental costs remain minute, this author is inclined to believe: the more data centres, the better.
Featured Image: Unsplash / Geoffrey Moffett
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