The AI boom embraces advancements and widespread adoption of artificial intelligence technologies, primarily fuelled by increased data availability, improved computing power, and better algorithms. 

It is a transformative era for technology and various industries, likened to the dot-com boom, with rapid progress in areas like large language models and generative AI applications AI is being integrated into a wide range of industries and applications, from healthcare and finance to transportation and entertainment.  

The AI boom is expected to have a significant impact on how we live, work, and interact with technology. It has the potential to revolutionise industries, create new jobs, and automate tasks.  

The digital age has created vast amounts of data, which is crucial for training and improving AI models. This includes data from the internet, social media, and various businesses.  

Allied to that is the continued evolution of powerful processors and specialised hardware which has enabled training and deployment of previously impossible complex AI models.  

Deep learning and other advanced algorithms have made it possible for AI to learn from data and make predictions with greater accuracy, especially in tasks such as image recognition, natural language processing, and machine translation.   

National AI strategy  

The government aims to establish UK the sovereign AI initiative, part of the AI Opportunities Action Plan, with the target of setting up “UK Sovereign AI”, a top-level research lab in partnership with the private sector to develop next-generation AI capabilities. This will focus on supporting domestic AI startups, creating national AI champions, and fostering public-private collaborations1.  

It will support the private and academic sectors, with the ability to collaborate internationally, create joint ventures, as well as invest in, incubate and spin out AI companies  

The government is building its AI vision around a clear position on which areas of AI research are strategically important for the future of the technology, so to make concentrated bets in these areas. It aims to remove barriers and make deals to maximise the UK’s chance of growing globally competitive national champions1. 

It advises: “This could involve supporting entrepreneurs to create new companies, backing startups to scale or partnering with existing AI companies that are already at the frontier to maximise the UK’s upside however the technology develops.”1 

It views Innovate UK as a central component, tasked with making AI a top priority. It will support the unit through the funding it provides to promising start-ups. 

UK Sovereign AI strategic activities  

• Direct investment into companies, including promising start-ups as well as joint ventures with other commercial partners. 

• Delivering appropriate sites in the UK, including through AI Growth Zones, and international partnerships to guarantee access from appropriate allies. 

• Packaging and providing responsible access to the most valuable UK-owned data sets and relevant research. 

• Supporting UK-based AI organisations working on national priority projects to bring in overseas talent and headhunting promising founders or CEOs and their teams by convincing them to relocate to the UK. 

• Facilitating deep collaboration with the national security community. 

Hidden costs 

The AI boom comes with hidden costs beyond initial investment. These include energy consumption, resource strain, and potential job displacement, along with the risk of exacerbating inequalities and compromising human expertise.  

AI systems require immense computing power and data storage, leading to significant energy consumption and a substantial carbon footprint. This can strain power grids and contribute to climate change. Data centres, essential for AI, also consume large amounts of water for cooling, impacting water resources.  

The AI boom may also exacerbate economic inequalities by favouring high-skilled workers who can utilise AI tools, while potentially displacing those in routine tasks. This could lead to a wage squeeze or unemployment for some, while others see their wages rise.  

While AI can automate tasks and increase efficiency, it can also lead to job displacement. Reliance on AI-driven decision-making might also erode human critical thinking skills and industry-specific knowledge.  

There is also the possibility that the demand for computing power and data storage may outpace the available supply, potentially leading to shortages and increased costs. Strain on power grids and water resources further adds to the pressure.  

AI systems can be biased, raising ethical concerns about fairness and accountability.  AI models are only as good as the data they are trained on, and biased data can lead to skewed results. This can have serious implications for sustainability initiatives, as it can lead to ineffective or even harmful solutions.  

Data privacy, intellectual property rights, and the potential for misuse of AI technology also need careful consideration.  

In SaveMoneyCutCarbon’s view, there is a need for a more holistic approach to AI development and deployment in the UK, focusing on energy efficiency, resource conservation, and ethical considerations.  

Business benefits  

AI can help businesses reduce costs in various areas, such as customer service, marketing, and operations. It can deliver: 

• Increased efficiency and productivity 

• Improved customer satisfaction and loyalty 

• Reduced costs and increased profitability 

• Enhanced decision-making and strategic planning 

• Greater competitive advantage 

• Opportunities for innovation and growth.  

SaveMoneyCutCarbon advises that AI could also help to provide more accurate and granular ESG reporting while also acting to monitor regulatory changes, with rapid response. Real-time tracking of regulatory proposals and changes across regions should minimise penalties while bolstering reputation, demonstrating commitment to sustainable and ethical practices. 

Business practice could be enhanced considerably with AI inventory optimisation and execution that reduces excess inventory while optimising transportation and supplier alignment and collaboration. More efficient production with better  on-time delivery could reduce waste and improve sustainability across the entire production and supply chain. 

AI could also be used to optimise waste management and recycling processes with automated sorting that could prevent contamination and predict maintenance issues. The continuous review of all operations with the potential for making rapid recommendations should help businesses adapt and evolve sustainably in real time. 

Business can adopt AI platforms that automate routine tasks like data entry, invoice processing, and customer service inquiries, improving efficiency and reducing costs. And AI chatbots can provide instant support with  personalised recommendations to enhance the shopping experience, and AI-powered marketing can target customers with relevant offers.  

The technology can analyse customer data to identify trends, personalise marketing campaigns, and predict future sales, leading to better decision-making. At the same time AI can help identify new market opportunities, develop innovative products, and improve existing ones.  

AI-powered tools can manage calendars, prioritise tasks, and assist with various administrative tasks, freeing up employees to focus on higher-level work.  

It can also be deployed to help detect and prevent cyberattacks, protect sensitive data, and improve overall security.  

What could make AI unsustainable? 

SaveMoneyCutCarbon advises that AI's sustainability is threatened by its energy-intensive training and operation, the large-scale production of electronics, and the potential for increased environmental impact due to mining and waste.  

The rapid development of powerful AI models also leads to increased electricity demand, water consumption, and faster hardware replacement cycles, contributing to electronic waste.  

Training large AI models, especially deep learning models, requires immense computational power and energy, leading to significant carbon emissions. AI operations rely on massive data centres that consume vast amounts of electricity, contributing to greenhouse gas emissions. Graphics Processing Units (GPUs) used in AI require more energy and cooling (more water use) than traditional CPUs, further increasing energy demands.  

And the carbon footprint of AI is not limited to the training and running of models. It also includes emissions from the production and transport of hardware, as well as the environmental impacts of obtaining raw materials. Mining operations used to extract the materials needed for AI hardware can cause soil erosion and pollution while the manufacturing and processing of AI components can involve the use of toxic chemicals, which can contaminate soil and water2.  

Business challenges  

UK businesses may be faced with the challenges of lack of AI skills and expertise, poor data availability and quality, ethical concerns and data privacy. Along with that there might be regulatory uncertainty, as well as the need for ongoing training and support.  

SaveMoneyCutCarbon advises that to counterbalance these challenges, businesses could invest in programmes that equip staff with the skills needed to utilise AI tools effectively, and prepare workers for the changing job market. 

Companies could establish ethical guidelines and frameworks for AI development to help mitigate bias and ensure responsible use.  

Crucially, businesses can benefit from investment in renewable energy sources, while choosing green technology partners, particularly data centres with highly efficient use of energy and water. 

In SaveMoneyCutCarbon’s view, open communication between researchers, policymakers, and the public is essential for addressing the ethical and societal challenges of AI.  

The government believes that adoption of high-performing, trustworthy AI at scale will be critical to the fulfilling the Five Missions: 

1. Kickstart economic growth 

1. Make Britain a clean energy superpower 

1. Take back our streets 

1. Break down barriers to opportunity 

1. Build an NHS fit for the future1.  

It says that AI should become core to how the UK thinks about delivering services, transforming citizens’ experiences, and improving productivity. As well as strengthening the foundations - data, skills, talent, IP, and assurance measures – it aims to focus on its role as a major user and customer of AI and how it uses its powers to stimulate private sector adoption1. 

Bibliography 

1“AI Opportunities Action Plan” (Accessed May 2025) https://www.gov.uk/government/publications/ai-opportunities-action-plan/ai-opportunities-action-plan  

2 “AI has an environmental problem. Here’s what the world can do about that” (Accessed May 2025) https://www.unep.org/news-and-stories/story/ai-has-environmental-problem-heres-what-world-can-do-about