40% of planned US data centre capacity is in states where newly elected governors promised to halt or pause construction. Texas swung blue for the first time since 1990 – and Texas alone accounts for 25% of planned capacity. Whilst “AI wasn’t technically on the ballot” it was very heavily implied! Public sentiment is suddenly making it more difficult for the US to build sovereign AI infrastructure.
I can see why Americans don’t like data centres. As per the FT, the three places least enamoured with AI (which includes the US) are famous for having a particularly unpopular billionaire class, and much of that sentiment is surely driven by concerns about the centralisation of power. There’s an economic and social divide, informed by the last wave of technological progress that was poorly distributed. Developing countries, meanwhile, are the most optimistic. The last wave of technological progress was instrumental in the creation of the vast Indian middle class - who are some of AI’s greatest proponents.
The UK is earlier in its data centre building journey than the US and we have the opportunity to entertain a more nuanced perspective. The opportunity for achieving massively positive social and economic outcomes from the buildout needs to be considered alongside the potential harms.
Those potential harms are widely argued. Protests against “dirty data centres” took place across the UK & Europe last week. Concerns voiced include water scarcity, rising energy bills and housing shortages – all massive, but pre-existing problems that need real solutions. These concerns shouldn’t be dismissed, but nor should we assume they are the primary motivation for the AI backlash. The underlying cause is likely a fear reaction to the uncertainty brought about by the new technology, and how its benefits will be distributed across society.
The potential beneficiaries of AI infrastructure - the nation, and the public - are less well marketed. But AI infrastructure is critical for the nation’s economic growth and security. At present only 4% of UK data is kept locally, and we have no leverage with the world’s two superpowers. The US controls ~75% of global AI compute capacity, China 15%, and the rest of the world just 10%, with the UK accounting for only 2-3%. Individual US data centres are now bigger than all of Europe’s compute combined! The US strategy is to build the technology, export the stack and dictate the terms. China mirrors this with their Digital Silk Road. And a White House anecdote I heard at a conference recently: US officials, sitting down to think about a deal with the UK, weren’t sure what to ask us for beyond our biobank…
Where do we expect our future economic growth to come from? What happens if AI’s promise materialises and global GDP growth accelerates substantially from 1-2%, to 8% or 10%? What happens if the UK plays little part in that? From a national perspective, building AI infrastructure would appear to be a poorly communicated imperative.
The potential benefits to the public are even less well communicated. As Azeem Azhar commented following the US midterms, the backlash was “not the death knell of AI, but the price to make it better”. Our own government’s new Data Centre Covenant sets out 5 tests for data centre developers: pay a fair share of energy-system costs, invest in local communities, meet high environmental standards, support British jobs and economic growth, and strengthen the UK’s security and resilience. This might sound fanciful, but we are at a point in the cycle where considerable leverage exists with Big Tech, if we choose to use it. Examples already exist.
In Scotland, near the old Ravenscraig steelworks, DataVita has proposed a community investment fund worth up to £543m over 15 years. That is a meaningful sum for a community with a long industrial history. In Quincy, Washington, Microsoft’s 20-year record shows tax revenue up twelvefold, residents paying a third less, growth ahead of Seattle, and a new school, hospital and aquatic centre. In Richland Parish, Louisiana, Meta’s data centre lifted sales tax collections by 260%, and that money went straight to certified school staff, most notably teachers, who got ~$45k bonuses. Meta’s workforce academy also pays trainees full wages from day one and trains them as electricians, welders and so on: trades that are useful beyond the data centre build-out. That retraining cost is landing on the tech company, meanwhile in the UK we’re lamenting the 1m 16-24 year-olds who are NEET.
Overseas, everyone is talking about how the AI dividend gets returned to the proletariat! We don’t have the capital markets of the US - no Elon planning to give SpaceX stock to every child. In the UK, data centres could offer a more tangible opportunity.
Choose a range of sites from Britain’s many languishing industrial zones, cut the red tape on licensing, allow them to build their own power capacity until our renewable build out is complete (did you know Wales, where the linked industrial zone above is, produces more electricity than it can use and is on track to be 100% renewable by 2035!?) and tax them healthily to bring the financial benefits they create back into the community.
The last generation of internet billionaires built fortunes that were ephemeral. This new wave of investment is different. It involves bricks, mortar, chips, energy infrastructure and physical assets that have to sit somewhere. And that creates leverage. Physical assets cannot flee to tax havens.
Matt Levine recently discussed the concept of “nonlinearity”. The basic premise is that small changes in the state of the world today, during a time of massive technological change, can lead to enormous differences in the future.
One really good orator, right now, making the case for Britain leading the way in socially conscious AI development is something the public could get behind. One good orator pushing that message could change the course of British history. We could limp slowly into the new dawn, or we could bring people with us, and make the companies building this pay huge amounts every year in “council tax”.
IPOs / Publics
Markets whipsawed on the midterms. A relief rally on Wed gave way to Thursday’s 6.3% Nasdaq drop, the worst day since the pandemic, as investors priced in Democratic data-centre curbs; Nvidia lost $440B in a session & chip stocks had their worst week since March 2025. By Monday the Nasdaq 100 was +3.3% as the dip got bought, though Nvidia kept falling on the Jensen Huang “news” (here)
Anthropic has taken another step toward its debut. The company set terms for its IPO, planning to raise $61B by offering 825M shares (2.9% secondary) at a price range of $70-$78. Including a $26B concurrent private placement, the total raise could reach $100B at the top end, with the greenshoe exercised. It is expected to begin trading on Nov 19 under ANT. At the midpoint, Anthropic would command a fully diluted market value of $1.22T, excluding convertible debt. A notable step down from the $2T or more that some backers had reportedly expected the company to fetch just 2mo ago. However, still the second largest IPO ever behind SpaceX ($75B raised; $1.75T valuation) (here)
Michael Burry criticised Anthropic’s amended S-1, highlighting $895B in committed compute spending against Q3 revenue of $17B & bullish forecasts of $100B next year - a 9x gap he says the market hasn’t fully grasped (here)
Agility became the first pure-play humanoid on a US exchange. Its SPAC merger with Churchill Capital XI closed & AGLT began trading on 5 Nov at ~$2.5B. It raised ~$465M gross versus the $600M+ it projected (here)
Nvidia opened an independent investigation after reports CEO Jensen Huang was targeted by Chinese intelligence via a relationship with a suspected MSS asset at datacenter firm Megaspeed. Huang admitted a romantic relationship & apologised to employees; Trump downplayed the issue despite Republican lawmakers demanding a closed-door briefing on security protocols. The episode underscores growing scrutiny of tech leaders’ entanglements with Beijing amid US export controls on advanced AI chips (here)
Big Dogs
OpenAI president Greg Brockman said the company now generates the majority of revenue from enterprise customers & expects to be ready for an IPO in 2027 (here)
OpenAI pledged to halt NDAs with officials, publish data centre plans & pay full power costs after US voters rejected AI infrastructure expansion in 40 of 41 local ballots across 10 states, reflecting concerns over utility bills, environmental harm & job loss. The company targets $600B compute spend by 2030 & has major projects in Georgia & Ohio (here)
OpenAI says ChatGPT now processes 20% of Google’s search query volume (here)
Cat Wu, who led Claude Code at Anthropic, joined OpenAI to run product for core products including Codex, a significant talent capture as OpenAI seeks to close the enterprise gap Anthropic opened in coding tools (here)
Anthropic released Claude Fable 5.2 & Claude Mythos 5.2 - 30% faster, 20% cheaper ($8/$40 per M tokens) - days before its IPO roadshow begins (here)
Anthropic bought $3.4B worth of gas-fired generators (1.7 GW) from OnePWR Solutions, taking over equipment orders placed with Caterpillar 2 years earlier to bypass stretched lead times & secure near-term power. The deal - the largest known equipment purchase by an AI lab - mirrors xAI’s $2B turbine buy & reflects frontier labs integrating vertically into energy infrastructure as they compete for scarce generation capacity (here)
Google DeepMind staff in London are pushing to remove lifetime non-disparagement clauses from existing contracts, arguing they prevent workers from warning the public about AI risks even after leaving (here)
Venture Capital
Sequoia closed its London office & restructured as one flat team (no more Early & Growth split), exiting batch accelerator Arc & Scouts to focus on high-conviction venture; the firm insists it will continue backing European founders from the Bay Area, has raised ~$10B in new funds, & promoted five operators while welcoming three new partners including former founder Dev Ittycheria (here)
Valor Equity Partners raised $3.3B for its flagship fund, up from $2.35B in 2024, backed by its SpaceX track record & led by Antonio Gracias, a long-time Elon Musk ally (here)
VC in 2026 is about two giants. Take a16z out, and US fundraising looks much like 2025. Without SpaceX, this year’s exits are close to last year’s (here)
EIB’s “Tech Champions” alliance lines up €10B+ for European scale-ups. Targeting up to €80B with ~€200M tickets; Santander, BBVA, ABN AMRO, PGGM and APG among those signalling €8B+, plus a ~€2B fund of funds from 7 member states (here)
Regulation
Oracle cancelled a $7B, 5-year AI chip lease with Tencent after Trump administration officials raised concerns, illustrating growing bilateral pressure - US officials approached Oracle whilst Guangdong officials pressed Tencent to support domestic chips (here)
UK government opened consultation on a National Policy Statement for data centres, establishing assessment & approval framework for projects qualifying as Nationally Significant Infrastructure - a planning fast-track aimed at easing permitting bottlenecks as AI compute demand strains grid & land availability across England (here)
Australia will create a frontier-AI safety regulator with penalty powers – It accepted all 18 recommendations of a review prompted by an OpenAI agent breaching a Medicare portal; a criminal “failure to prevent” offence is under consideration (here)
Venture Geopolitics
Democrats won control of both House & Senate in 2026 midterms, ending Republican trifecta after voters soured on Trump over Iran war costs, tariffs, & corruption allegations (here)
NBC exit polling found 56% of US midterm voters cited AI data centres as a crucial or major factor in their congressional vote, behind corruption, cost of living, immigration & the Iran war. 76% opposed new data centres in their community, with opposition skewing Democratic (63% D to 35% R). Democrats won the House, Senate & notable gubernatorial races; at least 43 data centre moratoria passed (here)
British corporates including BAE Systems, AstraZeneca, GSK & British American Tobacco donated $3.7M to US midterm candidates via political action committees, underscoring how UK-headquartered firms with major US operations navigate Washington influence alongside domestic geopolitical risk (here)
Republican House leaders asked Nvidia CEO Jensen Huang to brief Congress behind closed doors on 18 Nov about his relationship with the Megaspeed executive (here)
Taiwan is weighing doubling prison terms for illegal chip exports to China. Proposed amendments set up to 10 years' jail & NT$10m fines (here)
At least seven commercial flights across Europe received bomb threats on Tuesday, forcing emergency landings & security sweeps in Poland, Spain, Bulgaria, & Italy; no explosives were found. The incidents follow rising hybrid warfare concerns & recent airspace security disruptions linked to Russia’s operations in Ukraine, including airport closures & false hijacking alarms in Germany (here)
Poland raised security on its border with Kaliningrad after warnings of possible sabotage or provocations, with PM Tusk citing “disturbing movement” & allied intelligence flagging risks of armed incursions in early November (here)
China’s trade surplus surged past $1T in the first 10 mo of the year, driven by strong exports of solar panels, EVs, & AI data centre equipment, whilst imports rose 41.6% in October on crude oil & electronics demand. The surplus with Europe reached $320.8B (10 mo), now exceeding the $266.5B US surplus, fuelling concerns about industrial job losses in France & Germany as Chinese manufacturing employment holds steady at ~71M through heavy automation (here)
Brussels is preparing a rapid-deployment “kill-switch” trade tool to restrict Chinese imports in response to a record €365B annual deficit & 25% surge in Chinese goods over the past year. China’s ambassador to the EU threatened countermeasures if the EU adopts “discriminatory measures”, while the Commission aims to present the instrument by year-end alongside sector-specific quotas & tariffs in chemicals & machinery (here)
Google announced it will turn off AI tools in K-12 software by default unless schools opt in, but schools that restrict AI entirely will lose student access to Google Search (here)
Cambridgeshire Police awarded Palantir a £10.1M contract for its Foundry data integration & analytics platform over 5 yr, extending the company’s footprint across UK policing after deployments at the Met, Thames Valley & other forces (here)
UK government has lost multiple senior China specialists from the Foreign Office in the past year, including Dan Chugg (head of China policy), Kate White (former head), Joanna Roper (former China department head) & Owen Jenkins (DG for Indo-Pacific). Whitehall insiders warn that no permanent secretary or director-general now has lived experience in Beijing, undermining UK policy capability across trade, security, AI & net zero at a time of US-China competition (here)
Foreign acquirers have snapped up over 300 UK-listed companies worth £500B+ over the past decade, with 2026 activity reaching £73B - the highest since 2018 - as persistent valuation discounts, weak domestic institutional ownership & private equity appetite create a structural clearing house (here)
UK announced £185M in new quantum funding - £138M for cross-government sensing procurement (including £30M from MoD, its largest quantum commitment), £35M for networking testbeds, & £12M for a national commercialisation skills centre led by Imperial. A UKRI impact report found £300M in public investment (2014-2024) helped create 2,000+ jobs, 74 spinouts, & attracted £482M in private capital. MoD confirmed a Defence Quantum Action Plan for early 2027 (here)
Strategic Sectors
AI
Meta launched Muse Ember at $0.10 per million input tokens, a lightweight model for agent sub-tasks, pitched against Claude Haiku 5.5 and GPT-6 Luna (here)
Geoffrey Hinton warned AI could trigger a major incident - power or banking shutdown - within 12 mo, comparing recent OpenAI agent breaches to Three Mile Island & predicting a ‘Chornobyl moment’ to force regulatory action (here)
Nvidia has ordered cloud computing partners globally to sell at least 51% of their services to non-Chinese clients, a verbal requirement implemented over the summer to pre-empt US regulatory criticism (here)
Fuse Compute went from concept to first customer in 4 mo (June-October), launching AI compute infrastructure amid power constraints; first cluster live December, positioning compute as fundamentally an energy supply problem (here)
Over 100 campaign groups across 15 European countries are coordinating protests on 5-6 November demanding a moratorium on large datacentre projects, citing environmental & social costs (here)
US voter pushback on data centre expansion risks raising AI compute costs, though hardware & software efficiencies have so far offset rising Nvidia prices - OpenAI’s GPT-6.1 Sol runs at one-fifth the cost of GPT-6 Astra for comparable tasks, whilst Anthropic’s 85% gross margins suggest pricing headroom (here)
European Commission launched a €525M chip design platform offering grants (up to €16M), tools, IP access & manufacturing to early-stage firms, targeting a segment where EU firms hold <1% global revenue. Officials frame the bet as essential to sustaining new European fabs: without domestic design demand, the Chips Act’s factory buildout won’t pay off (here)
Notable deal:
Thinking Machines nears a $5B raise at a $40B pre-money – a down-round on vibes. Accel reportedly leads, about 20% below the $50B floated in late 2025. It shipped Inkling 2 Small on 5 Nov (here)
Cybersecurity
UK House of Lords completed third reading of the Cyber Security & Resilience Bill, which strengthens cyber requirements for essential services (healthcare, water, energy) & grants government powers to instruct organisations on national security grounds; bill returns to Commons for consideration of Lords amendments (here)
The North Korean hackers that stole the $6.3B from Binance used fake recruiter profiles to trick a wallet engineer into downloading malware, then pivoted through compromised credentials to access crypto-control systems - despite years of public warnings about these exact tactics. The breach highlights persistent operational security gaps in crypto infrastructure under known state-sponsored threat, with North Korea attributed to nearly half of all US tech intrusions in recent years (here)
Hackers remotely overheated freezers to 55°C across supermarkets in Sweden, Belgium, Ireland, Finland & Estonia, spoiling food worth millions of euros in the second attack in weeks (here)
French blood banks were hit by cyberattacks targeting cold storage systems operated by external providers, with hackers raising temperature thresholds at three EFS sites (here)
Energy / Climate
UK’s Energy Independence Bill will mandate community benefit payments for renewable projects over 5MW - £5,000/MW annually for wind, £700/MW for solar - & allow local communities to buy up to 20% stakes (up from 5%), replacing the current voluntary approach. The move aims to shore up public support for net zero as both Conservatives & Reform UK pledge to scrap the 2050 decarbonisation target (here)
Netherlands sets a 110GWh battery-storage target for 2040 – 50x end-2025 levels, with flexible grid connections made standard (here)
Defence
UK is deploying specialist cyber ‘hunt forces’ overseas to pre-emptively disrupt hostile actors before they can launch attacks on British defence networks, marking a shift from reactive defence to forward-leaning offensive cyber operations (here)
OpenAI hired former US Army Secretary Dan Driscoll to oversee national-security modernisation, advising on AI applications in security capabilities & cyber defences as the company deepens its push into defence contracts & policy influence (here)
Republican lawmaker Thomas Massie filed articles of impeachment against US Defence Secretary Pete Hegseth over directing Iran military operations without congressional authorisation, following Republican losses in midterm elections where the unpopular Iran war was a top voter concern. A House vote could come this week, though removal requires Senate conviction; Trump continues to defend Hegseth, calling him “guilty of basically winning two wars” (here)
Helsing transferred source code for MissionOSBw - a combat drone operating system - to Germany’s military procurement agency, giving the state ownership rather than the contractor, an unusual arrangement in a €580M programme designed to reduce single-vendor lock-in & sidestep disputes that have stalled Europe’s FCAS fighter programme (here)
Notable deal:
Onodrim, a Dutch defence consolidator founded by former Palantir engineers Aistis Šimaitis & Alexander Blessing, raised $300M at $1.3B led by Lux Capital to acquire critical European defence suppliers & scale production. The firm targets dual-use SMEs facing capacity constraints as order backlogs swell post-Ukraine invasion, positioning as operator rather than financial buyer with founders staying on. Backers include General Catalyst, Lakestar, & Founders Fund (minority); focus areas include drone propulsion, radar, energetics, & aero-structures (here)
Space
Russia’s Rassvet satellite constellation - a Starlink rival funded 40% by Moscow at $6.2B - has launched 32 of a planned 250+ satellites, providing up to 3 hrs connectivity/day over Ukraine vs the 24-hr coverage needed for drone swarms. Ukrainian intelligence warns full deployment by 2027 would enable mass real-time drone strikes across Ukraine & potential sabotage operations in Europe (here)
EVs / AVs
Tesla will wind down Cybertruck production at Gigafactory Texas mid-2027 to make room for Cybercab (autonomous robotaxi) production, marking a strategic pivot from electric trucks to autonomy hardware (here)
Critical Resources
UK MPs warn Britain remains dangerously exposed to China’s critical minerals dominance 16 yr after Beijing first weaponised rare earths, with China still processing 80%+ of global supply. The Business, Innovation, Science & Trade Committee calls for precision de-risking, a new Critical Minerals Finance Facility, domestic mining expansion & allied buyers clubs to counter coercion risk across defence, batteries & green tech supply chains (here)