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Highlights
A large share of AI spending goes to physical infrastructure rather than software alone.
Data centres, power and cooling sit at the centre of the build-out conversation.
Specialist digital services names feature in how the theme is implemented.
Why Is AI Such a Physical Story?
Behind every AI application sits an enormous amount of hardware that has to be housed, powered and cooled. A substantial portion of AI investment flows not into algorithms but into data centres, power systems, cooling equipment, networking hardware and the land they occupy. This reframes the boom as an infrastructure cycle as much as a software one. The realisation that the bulk of the spending is physical has pushed commentators to look harder at the companies involved in designing, building and running that infrastructure, broadening the AI theme well beyond the familiar software names.
How Do Digital Services Firms Fit the Build-Out?
Building AI capability is not only about facilities; it is also about implementation, integration and the human expertise to make systems work in the real world. Kainos Group (LSE:KNOS) operates in digital services and technology implementation, the kind of practical work that turns ambition into functioning systems. This implementation layer is a recurring theme in coverage of how organisations actually adopt AI, because new tools and infrastructure still need to be configured, integrated and maintained. It is a reminder that the AI build-out creates demand for skills and services, not just hardware and buildings.
What Does This Mean for the UK AI Theme?
The physical and implementation angles round out a UK AI story that already spans semiconductors, software and data. With large national investment in AI compute and growing data-centre demand, the build-out theme connects policy ambition to tangible activity on the ground. The FTSE AIM 100 Index and the broader London market both include names exposed to different layers of this picture. By looking past the apps to the infrastructure and services beneath them, commentators paint a fuller, more grounded picture of how the AI theme is unfolding across the UK this Monday.
