Plea for data centre moratorium sends ‘wrong message’ to investors, MSPs told

Calls for a moratorium on new data centres “send very much the wrong message” and could impact investment in Scotland’s AI sector, MSPs have been told.Holyrood’s Economy Committee heard AI could add more than £23 billion a year to Scotland’s GDP by 2035.But Scottish Financial Enterprise chief executive Sandy Begbie said the “current tone” of the debate on data centres – which has seen the Scottish Greens and campaigners call for a moratorium on such developments – is “proving to be quite negative with investors”.Campaigners want the Scottish Government to impose a moratorium on new hyperscale data centres. (Stewart Attwood/PA)He added: “Words like moratorium send very much the wrong message to investors about the opportunity that exists.”Mr Begbie cited research by Morgan Stanley which suggested that globally, some 3 trillion US dollars (£2.2 trillion) could be invested in AI infrastructure by 2028.Asking how Scotland could “grab its fair share of that”, he said: “AI will be part of the future, data centres is very much part of that.“We will need them, we will need them for public sector services together with attracting additional investment.“It’s about how we do them, not whether or if we do them.Scottish Financial Enterprise chief executive Sandy Begbie (left) warned Scotland could lose out on ‘potentially billions of investment’. (Andrew Milligan/PA)“Scotland has a real opportunity that presents itself but unless we move quickly over the next couple of years, we run the risk of being left behind again.”Labour MSP Daniel Johnson pressed him on the risk of not building such centres in Scotland, with Mr Begbie saying more development is needed for the future.“This idea you will be able to get by with none, and let that investment opportunity pass you by, I think is just not going to be the right answer,” Mr Begbie told the MSPs.“We’re losing out on potentially billions of investment.”He said the issue needs to be considered “carefully”, despite the debate having “become quite polarised”.Read MoreMr Begbie said a “more nuanced” response is needed, adding: “We need to lift our heads and look at other countries, Scandinavia, the Republic of Ireland, who have actually taken a more proportionate response.”Also addressing the committee, Rich Wilson, chief executive of Gigged.ai, said more needs to be done to attract investment into the sector.He described his firm as being a “proud Scottish start-up” based in Glasgow which is working to help large enterprises merge human and AI skills together.“We work with Fortune 500 and FTSE 100 companies,” Mr Wilson told MSPs.Looking at the AI sector, he added: “Scotland doesn’t have a talent issue, we have got some of the best universities in the world, we’ve got some of the best talent in computer science and AI coming into the market.“We’ve got some amazing talent, I would say we have got the best talent in the UK.“But we do have a demand issue, we are not creating enough jobs. We are not creating enough data and AI jobs in Scotland.”He told MSPs he had visited a large call centre recently in Livingston, West Lothian, where “more than half” of the workers were AI or computer science graduates who could not get a job in AI.Mr Wilson said: “We need to go further in supporting scale-ups, we need to go further in bringing more inward investment. We need to do more.“To grow AI in Scotland we need to stop focusing on the supply element, we’ve got enough great people, we have got enough great graduates, we don’t have enough jobs for them in applied AI.”