Sage CEO: Don't Build Data Centres in UK

The chief executive of Britain’s biggest listed technology company has questioned the government’s push to build more data centres, arguing that the UK does not have the scale to become a truly sovereign AI nation.

Steve Hare, chief executive of Sage, says Britain should be realistic about where it can compete.

He argues that data centres themselves are simply infrastructure and do not give the UK control over the underlying technology. If Britain wants greater technological sovereignty, he believes it would need to work with larger economies rather than try to build the whole AI stack alone.

Instead, Hare thinks the bigger opportunity is in applications: using increasingly cheap and widely available AI models to build products that solve real problems for customers.

He points to the rapid fall in the cost of leading AI models and believes much of the value will ultimately sit with the companies building useful services on top of them.

His caution is informed partly by experience. Hare was finance director of Marconi when the dotcom bubble burst in 2001. Looking at the huge sums now being spent on AI infrastructure, he thinks much of that capacity will eventually be used, but not necessarily at today’s prices.

He is also worried about the wider UK economy.

Sage provides accounting, payroll and finance software to millions of small and medium-sized businesses, giving Hare a close view of what is happening inside companies. Its data suggests profits are rising faster than revenues, with many business owners holding on to cash rather than investing.

Hare says uncertainty around tax and economic policy is making that caution worse. He is particularly critical of repeated speculation over capital gains tax, which he believes risks pushing entrepreneurs to build their next businesses elsewhere.

He also points to Britain’s long-running problem with scale. The UK creates large numbers of new businesses, but relatively few grow into major global technology companies before being sold, often to overseas buyers.

Hare is due to meet the new prime minister at Number 10 and says the government now needs to make some difficult choices.

His central message is that stronger growth is the only sustainable answer to rising spending pressures, borrowing costs and the demand for higher public revenues.

And his advice to both business leaders and government is simple:

“Be bold and be paranoid.”

Presenter: Sean Farrington
Producer: Olie D'Albertanson
Editor: Henry Jones

01:47 AI hype and the pace of change
08:14 How AI will change work
09:18 Growth as the UK's biggest challenge
15:03 Tax speculation and entrepreneurs moving abroad
19:35 Apprenticeships and employment rights
23:49 The prime minister's tough choices
27:20 Britain's scale-up problem
28:49 Data centres & why the UK cannot be a sovereign AI nation
36:02 Lessons from the dotcom crash
41:02 Be bold and be paranoid