British firms are moving AI workloads out of the UK because of high energy costs, underscoring a widening gap between the UK’s AI sovereignty ambitions and the practical realities of infrastructure and energy.
The research, conducted by AI infrastructure provider CUDO Compute and Censuswide, polled over 700 senior AI decision makers in enterprises across the UK, US, and Europe. It found that energy pricing has become a critical bottleneck for the sector, with a third of UK organisations saying rising costs are actively limiting their ability to scale AI operations.
The research reveals that 20% of British firms have already moved AI workloads out of the UK, and highlights the growing tension shaping the UK’s AI strategy. While 46% of UK organisations say geopolitical instability is pushing them to keep AI workloads within home markets (compared to 36% overall), 43% say ‘cost and performance still outweigh sovereignty’ when it comes to deployment decisions.
The tension is sharpest among AI-first companies – those running the most compute-intensive workloads. Nearly a third said they would consider moving operations overseas if UK power costs continued to rise, compared with 18% of more traditional enterprise organisations.
When asked which markets they were eyeing for new AI cluster capacity, respondents ranked the United States first, with 72% viewing it favourably. India came second at 62%, while Eastern Europe scored 58% – higher than Western Europe at 45% and the Nordics at 44%. China ranked at 55%, above Latin America, the Middle East, Africa and Asia-Pacific.
Geopolitical pressures are adding a further layer of complexity. A third of UK organisations said they were actively considering relocating workloads for geopolitical reasons, while 45% said data sovereignty, regulatory compliance, and national security concerns were shaping their deployment strategy – a markedly higher proportion than the 33% figure recorded across Europe. Despite this, one in three UK firms said they were prepared to pay a premium for sovereign or regionally controlled compute. Organisations want to build in the UK – they just need the infrastructure with which to do so.
Matt Hawkins, CEO of CUDO Compute, said the findings exposed a blind spot in how AI investment is being discussed at the boardroom and policy level. “AI sovereignty is being hotly discussed as a priority for UK organisations, but it only works if the infrastructure exists to support it. What we are seeing is a growing tension between where businesses want to run AI and where they actually can.
“Right now, every UK boardroom is talking about AI, but almost nobody is talking about the infrastructure needed to power it. Until we close that gap, there will continue to be a disconnect between policy, ambition, and reality. 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.”
He continued: “AI is not abstract software. It is physical infrastructure that depends on power, land, cooling, and grid access. When those constraints tighten, economics take over. If it is cheaper or easier to run workloads elsewhere, they will move, regardless of sovereignty ambitions.”
