00:00SF Tech Week is a tech week, but you come here with a large delegation of both on the policy side, but the companies themselves.
00:10Why? What is it that you hope to get out of being here?
00:13Well, Ed, I think AI is a central focus for us in the UK. It is a fundamental part of our growth mission.
00:18And one of the things I'm most focused on here is to talk up the UK-US tech prosperity deal.
00:23It is a historic deal in its scale. We have a record set of investments, the biggest ever investment by Microsoft, and cumulatively, tens of billions going into the UK and deepening our collaboration.
00:35But fundamentally on scope. The UK and US have a deep history of a special relationship. We are renewing and rewiring that for the AI economy.
00:42Mr. Noron, the United Kingdom, as Europe is, is very dependent on very large American technology companies making investments and innovating.
00:56Is that a fair statement to your mind? And so how conscious is your government of a dependence on both the software and hardware side, what American companies are doing?
01:06Well, again, I think in any marriage, you talk about mutual dependence and a mutual sense of recognition and acknowledgement of strengths.
01:14In Britain, we have an amazing AI economy in particular. We have DeepMind, the home of a bunch of transformer models.
01:20We have a great chip design company in Arm located in the UK, and we have a budding set of entrepreneurs for the future of AI as well.
01:28And so we have a lot to offer to the United States. But of course, we want to do it when recognizing the deep strengths that the US has.
01:34That's why I'm here opening the doors for UK and US businesses to work more closely together.
01:41Kanishka, you mentioned great names, but DeepMind's owned by Alphabet and Masayoshi Sun in Japan generally controls Arm.
01:48A little bit of it trades and it trades on US indices. And I'm interested from your perspective, therefore, how much you're likely to see AI rewire that.
01:57How much does the UK want to be dependent on the UK? Or are you ultimately all still about trade independence on other nations too?
02:04Well, I think Caroline, that's a great question. But the fundamental thing I'd say is that we want to be open to the world in terms of business.
02:11So if people want to come and invest in fantastic talent and fantastic businesses in the UK, we are open for business.
02:17At the same time, of course, we want to make sure that people coming through our universities, people wanting to build businesses, have capital, have compute,
02:24and fundamentally have a deep community of support in the UK as well. A lot of what I'm here to do is to try and be the drum for that and to make sure that we're attracting the best folks to come and build in the UK as well as build in the UK for countries abroad.
02:38And Kanishka, across the UK, I think that's what's really interesting. There's been this focus on it, not like the services sector all being dominated in London, but spread out.
02:47I'm really interested in the AI growth zones. Have you thought about any more of the cities or the towns that are going to benefit from these data centers?
02:53And really, how much it does benefit those living there? Because data centers don't add that many jobs. They're a big suck on power and water.
03:00Well, this is a really, really critical question, Caroline, because in the last wave of software and as a former SaaS investor,
03:06I saw a huge amount of the gains and the jobs concentrated in a very small number of places for a small number of people.
03:12The whole point of what we're doing on the AI revolution with our growth zones program is to spread opportunity right across the length and breadth of Britain.
03:19I represent a constituency in Wales, which has a beating heart of the compound semiconductor industry.
03:25Exactly as you say, we are creating 5,000 jobs in the northeast near Newcastle for Premier League followers.
03:32They'll know it very well. And we are keen on making sure that whilst it's the case that there are some jobs with data centers,
03:37that that's the start, not the end of the journey.
03:39We want to create a ton of jobs in adapting and using compute from data centers, not just building them.
03:45In South Wales, formerly known as Newport Wafer Fab, now known as Vichay, I think.
03:52That's right. I've got a newspaper clipping on a board in my kitchen about that.
03:56Minister, the financing of the infrastructure projects in the United States are getting interesting, to say the least.
04:04We are reporting on mechanisms where investors make a special vehicle, raise capital.
04:09XAI, in that example, leases the capacity.
04:11The U.S. government has taken a stake in Intel, for example.
04:16Caroline and I have been talking a lot about N-Scale recently.
04:19What options does the U.K. government see in accelerating the build out,
04:25but also any direct mechanism that you might be considering financially or otherwise to support those initiatives?
04:32Well, the broad thing I'd say is what is happening, I think, across the market in terms of financing
04:35is a recognition that there is very significant value creation and value uplift from building out AI infrastructure.
04:43And so that is the starting point for what is going on in the market.
04:46And whether we invest in companies or whether we invest more indirectly is an open question.
04:53The fundamental thing that we're focused on is making sure we create a fantastic scale of AI infrastructure.
04:58We have the right level of compute and we have talent that can make the most of it.
05:02N-Scale is a great example, the largest ever Series B in Europe for a British company.
05:08Right, outside of the United States.
05:10Outside of the United States, building out in the U.K.
05:13I don't think there was a direct financing requirement there at all,
05:16and so we're not going to be playing with taxpayer money where it's not required.
05:19What we are focused on is doing everything we can, and I speak to the founders of N-Scale regularly as well,
05:25everything we can on permitting, on planning, on wider support to make sure that the value uplift of AI is captured in the U.K.
05:31This U.K. government has net zero obligations.
05:34And so with AI, could you explain to our global audience, many people, by the way, watch this program in the United Kingdom,
05:40how you're going to have an energy policy that supports AI and its energy demands?
05:46Well, look, I think we have two things that we want to make sure we do.
05:49We have a clean power mission by 2030, which is critical to what we ran the election on.
05:53We have a deep democratic mandate for, and we have an AI revolution that we want to make the most of as well.
05:58The trick here is to make sure that the two of those reaffirm each other.
06:02We are building AI infrastructure in places with renewable energy,
06:06and in turn, we are using AI to make our renewable energy build-out way more efficient as well.
06:11Minister, it's a tough time for governments around the world when it comes to spending
06:16versus the size of their deficits or their borrowing.
06:19And it's interesting that Andrew Bailey, of course, leader of the Bank of England,
06:21just this week talking to Bloomberg and the economy writ large,
06:26saying the U.K. must invest more in the AI if they're going to ride this wave.
06:30What do you, as someone who understands investment,
06:33tell the capital markets of the U.K. and, indeed, pension funds and those that are based there
06:38in terms of actually driving capital investment,
06:40not just coming from the big U.S. players into the United Kingdom?
06:42Well, Caroline, I think this is a central question.
06:46And the thing I say to everyone in the capital markets in the U.K. and abroad is two things.
06:50One, it's time to put risk on.
06:53We want to try and make sure that we are investing in the future of our people in the U.K.,
06:57the future of our kids growing up and wanting to build fantastic AI companies,
07:01and I want the capital markets to be deep partners in that mission.
07:04But the second thing is there's not a one-way ask.
07:06It's a two-way exchange, and the offer from government is a very clear one.
07:10We are laser-sharp focused on making sure that when you invest with a clear sense
07:14of taking on more risk in AI infrastructure,
07:18we will be there hand-in-hand clearing the way for you
07:21in terms of making sure it's an efficient and easy build.
07:23Let's see.
07:25What do we have here?
07:26Let's see.
07:26Let's see.
07:26Let's see.
07:27Let's see.
07:28Now, we are going to get a little bit of focus here for you.
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