Nvidia CEO Jensen Huang recently announced a major investment in the UK’s artificial intelligence (AI) sector, including a new AI lab at the University of Bristol.
The university is already home to Isambard-AI, the UK’s most powerful supercomputer dedicated to AI research. Speaking alongside Prime Minister Keir Starmer, Huang’s comments signalled a bold step forward for Britain’s role in global AI innovation.
But as the UK accelerates its AI ambitions, it must also confront the growing environmental costs and ethical considerations underpinning this powerful technology.
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The hidden environmental toll of AI
Energy-hungry algorithms and infrastructure
AI carries a significant environmental cost.
The energy required to train and operate models – alongside the cooling demands of data centres – accounts for around 1.5% of global electricity demand, and that’s projected to rise to 3% by 2030.
The problem worsens when AI is used in cases where simpler solutions would suffice, like automating routine emails or reports. Without regulation, AI’s expansion risks straining resources and accelerating climate change.
Resource extraction and waste
AI hardware relies on rare minerals like lithium and cobalt.
Extracting these causes pollution, ecosystem damage, and raises ethical issues including child labour and exploitative conditions.
Increased AI use also boosts electronic waste, much of which is improperly recycled.
What are some of the other unintended impacts of AI
Misinformation and deepfakes
Deepfakes – AI-generated audio and video mimicking real people – spread misinformation and manipulate public opinion.
As they improve, they could destabilise democracies and incite conflict.
Job displacement
AI threatens employment across sectors like manufacturing, journalism, and customer service.
Reports warn up to eight million UK jobs could be lost.
Without robust retraining and social support, AI could deepen inequality, despite boosting productivity.
Bias and surveillance
AI learns from data that might reflect societal biases, leading to discrimination.
If an AI system is used in hiring, for instance, it could discriminate against particular groups by favouring CV’s that resemble those of historically successful candidates.
Its ability to process personal data in real time also enables powerful surveillance, risking privacy violations and misuse. AI tools could be exploited to monitor people, suppress expression, and influence decisions, including voting.
Accountability
When AI systems make decisions independently, it can be difficult to determine who is responsible when they malfunction or produce unexpected results – whether it’s the developers, the users, or the company that deployed the system.
Additionally, since AI systems are often trained on vast datasets containing information owned or generated by individuals, this raises questions about the rights of data owners and how their information is used.
AI is advancing at a pace that outstrips most people's understanding, and global regulators are scrambling to keep up. That means that issues of AI liability are complex, and often not covered by an existing legal framework.
How to invest in AI responsibly – 2 share ideas
Without comprehensive government regulation, it’s crucial that companies regulate themselves.
Here are two companies that we think are harnessing the power of AI in a responsible way.
Investing in an individual company isn’t right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.
NVIDIA
There’s one name that stands out for exposure to the broader AI theme, without having to pin all hopes on a single technology or product, and that’s NVIDIA.
Once known primarily for powering video games, the company has reinvented itself as the essential infrastructure provider for AI.
Its powerful chips now fuel the training and deployment of the most advanced models, enabling everything from natural language processing to robotics. As demand for AI applications accelerates, so does the need for the high-performance computing NVIDIA delivers.
What sets NVIDIA apart is not just its hardware dominance, but the full-stack ecosystem it’s built around it.
Its software platforms and developer tools make it easier for companies to scale AI applications quickly and efficiently. This end-to-end approach has made NVIDIA a cornerstone in a market where speed, efficiency, and scalability are paramount.
NVIDIA’s meteoric rise over the past couple of years rightly raises the question of how much value is left to unlock.
We expect growth to slow and market share to drop as new entrants enter the market.
Even so, we see enough growth on the table for the valuation to still look attractive.
Key challenges for investors to monitor centre around supply dynamics for new product launches and shifting geopolitical landscapes.
One of the authors holds shares in NVIDIA.
Palo Alto Networks
Palo Alto Networks is a leading company in cybersecurity, helping businesses protect themselves from online threats.
It offers a platform with a wide range of tools, including protection for company networks, data security in the cloud, and help for IT teams to detect and respond to attacks.
Not only does Palo Alto help to solve some of the security issues that increased AI use brings, but it also scores highly on traditional ESG scorecards.
As cyberattacks grow more frequent and sophisticated, companies are flocking to all-in-one security platforms like Palo Alto’s, which we see as a hot commodity.
The proof’s in the pudding, with customers in pretty much every large US company you can think of.
Security’s critical nature gives Palo Alto good pricing power, and high switching costs keep customers loyal – a big edge for established players.
Cross-selling to existing clients is a goldmine, and Palo Alto’s poised to capitalise.
To scale, it’s offering parts of the platform for free to lure customers from legacy providers, boosting market share but denting short-term revenue.
Given how sticky customers are once on board, we think it’s a smart trade-off.
Financially, it’s set for some of the sector’s fastest profit growth, with strong cash flows and potential for double-digit revenue gains and wider margins.
Palo Alto’s stellar reputation and broad product range keep customers hooked, though fierce competition remains a risk to watch.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss. Yields are variable and not guaranteed.
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