<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-820x461.png" alt="" class="wp-image-574742" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-820x461.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer.png 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Britain’s Prime Minister Keir Starmer gives a media interview while attending the 79th United Nations General Assembly at the United Nations Headquarters in New York, U.S. September 25, 2024. Leon Neal | Via Reuters</figcaption></figure>



LONDON — The U.K is looking to build a homegrown challenger to OpenAI and drastically increase national computing infrastructure, as Prime Minister Keir Starmer’s government sets its sights on becoming a global leader in artificial intelligence.



Starmer is set to visit Bristol, England, on Monday to announce the pledge, which follows work done by British tech investor Matt Clifford to establish an “AI Opportunities Action Plan.” The plan aims to help the U.K. take advantage of the potential of AI.



The government is primarily seeking to expand data center capacity across the U.K. to boost developers of powerful AI models which rely on high-performance computing equipment hosted in remote locations to train and run their systems.



A target of increasing “sovereign,” or public sector, compute capacity in the U.K. by twentyfold by 2030 has been set. As part of that pledge, the government will begin opening access to the AI Research Resource, an initiative aimed at bolstering U.K. computing infrastructure.



Starmer’s administration last year canceled £1.3 billion of taxpayer-funded spending commitments towards two significant computing initiatives in order to prioritize other fiscal plans. The projects, an AI Research Resource and a next-generation “exascale” supercomputer, were pledges were made under Starmer’s predecessor, Rishi Sunak.



Sovereign AI has become a hot topic for policymakers, particularly in Europe. The term refers to the idea that technologies critical to economic growth and national security should be built and developed in the countries people are adopting them in.



To further bolster Britain’s computing infrastructure, the government also committed to setting up several AI “growth zones,” where rules on planning permission will be relaxed in certain places to allow for the creation of new data centers.



Meanwhile, an “AI Energy Council” formed of industry leaders from both energy and AI will be set up to explore the role of renewable and low-carbon sources of energy, like nuclear.



It comes as tech giants like Amazon, Microsoft and Google are investing hundreds of millions of dollars in small modular reactors (SMR) to provide nuclear energy for the data centers that power their AI systems.



<h2 class="wp-block-heading" id="h-building-a-challenger-to-openai"><a></a>Building a challenger to OpenAI</h2>



The last major initiative the U.K. government proposed was to create homegrown AI “champions” of&nbsp;a&nbsp;similar scale to American tech giants responsible for the foundational AI models that power today’s generative AI tools such as OpenAI’s ChatGPT.



Britain plans to use the AI growth zones and a newly established National Data Library to connect public institutions — such as universities — to enhance the country’s ability to create “sovereign” AI models which aren’t reliant on Silicon Valley.



It’s worth highlighting that the U.K. faces serious challenges in its bid to create an effective OpenAI alternative. For one, several entrepreneurs in the country have bemoaned funding challenges that make it difficult for startups in the country to raise the kind of cash available to AI success stories.



Many U.K. founders and venture capitalists have called for the country’s pension funds to allocate a greater portion of their portfolios toward riskier, growth-focused startups — a reform the government has committed to pushing previously.



“In the U.K., there’s $7 trillion in this pocket,” Magnus Grimeland, CEO and founder of venture capital firm Antler, told CNBC in an interview last year. “Imagine if you take just 5% of that and allocate it to innovation — you solve the problem.”



U.K. tech leaders have nevertheless generally praised the government’s AI action plan. Zahra Bahrololoumi, Salesforce’s U.K. boss, told CNBC the plan is a “forward-thinking strategy,” adding she’s encouraged by the government’s “bold vision for AI and emphasis on transparency, safety and collaboration.”



Chintan Patel, Cisco’s chief technology officer in the U.K., said he’s “encouraged” by the action plan. “Having a clearly defined roadmap is critical for the UK to achieve its ambition to become an AI superpower and a leading destination for AI investment,” he said.



Britain doesn’t yet have formal regulations for AI. Starmer’s government has previously said it plans to draw up legislation for AI — but details remain thin.



Last month, the government announced a consultation on measures to regulate the use of copyrighted content to train AI models.



More generally, the U.K. is pitching a differentiated regulatory regime from the EU following Brexit as a positive factor — meaning, it can introduce regulatory oversight for AI but in a way that’s less strict than the EU, which has taken a more hard-line approach to regulating the technology with its AI Act.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-820x462.jpeg" alt="" class="wp-image-452310" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Gold purchases from central banks led to last year’s surge, with purchases exceeding 1,000 tons for two consecutive years.
Traffic_analyzer | Istock | Getty Images</figcaption></figure>



Commodity prices are largely expected to fall in 2025 due to a sluggish global economic outlook and a resurgent dollar, but gold and gas prices are poised to rally this year, according to industry experts.



Commodities had a mixed 2024: While investors flocked to gold to hedge against inflation, commodities such as iron ore fell as the world’s largest consumer of metals, China, struggled with tepid growth. The story this year is likely to be the same.



“Commodities in general will be under pressure across the board in 2025,” said research firm BMI’s head of commodities analysis Sabrin Chowdhury, adding that the strength of the U.S. dollar will cap demand for commodities priced in the greenback.&nbsp;



Market participants will be keeping an eye on further China stimulus in hopes that it may fuel a recovery in commodities demand in the world’s second-largest economy.&nbsp;



<h2 class="wp-block-heading" id="h-oil-prices-to-slip"><a></a>Oil prices to slip</h2>



Crude oil prices last year were dragged down by weak Chinese demand and a supply glut, and market watchers expect prices to remain pressured in 2025.



The International Energy Agency in November painted a bearish oil market picture for 2025, forecasting global oil demand to grow under a million barrels per day. This compares to a two million barrel per day increase in 2023.



Commonwealth Bank of Australia sees Brent oil prices falling to $70 per barrel this year on expectations increased oil supply from non‑OPEC+ countries that’ll eclipse the rise in global oil consumption.



BMI said in its December note that the first half of 2025 was likely to see a supply glut as substantial new production from U.S., Canada, Guyana and Brazil comes online.&nbsp;Also, if OPEC+ plans to roll back voluntary cuts materialize, the oversupply will further pressure prices.



BMI noted that the demand picture in 2025 was not clear yet. “Global oil and gas demand remains uncertain, with stable economic growth and rising fuel demand offset by trade war impacts, inflation and contracting demand in developed markets.”



Global crude benchmark Brent was last trading at $76.34 per barrel, around the same levels as it was a year ago in early January.



<h3 class="wp-block-heading">Gas set to rise</h3>



Global natural gas prices have rallied since mid-December 2024, driven by cold weather and geopolitics, Citi analysts said.



Ukraine’s recent halt of Russian gas flow to several European nations on New Year’s Day has introduced greater uncertainty to the global gas markets. As long as the cutoff remains in place, gas prices are likely to remain elevated.



Colder weather for the rest of winter in the U.S. and Asia could also keep prices elevated, said Citi.



BMI forecasts gas prices to rise by about 40% in 2025 to $3.4 per million British thermal units (MMbtu) compared to an average of $2.4 per MMbtu in 2024, driven by growing demand from the LNG sector and higher net pipeline exports.&nbsp;



U.S. Henry Hub natural gas prices, which was the gauge that BMI referred to, are currently trading at $2.95 per MMbtu.



“LNG will continue to drive new consumption, supported by rising export capacity and strong demand in Europe and Asia,” BMI analysts wrote.&nbsp;



<h3 class="wp-block-heading">Gold may add sheen</h3>



Gold prices notched a slew of all-time highs last year, and the run of fresh records could extend in 2025.



“Investors are optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt,” said Adrian Ash, director of research at BullionVault, a gold investment services firm, emphasizing on the yellow metal’s role as a hedge against risk.&nbsp;



JPMorgan analysts also expect gold prices to rise, especially if U.S. policies become “more disruptive” in the form of increased tariffs, elevated trade tensions and higher risks to economic growth.&nbsp;&nbsp;



Gold notched its best annual performance in over a decade last year. Bullion prices rose about 26% in 2024, data from FactSet showed, driven by central bank as well as retail investor purchases.



BullionVault and JPMorgan expect gold prices to go up to $3,000 per ounce in 2025.



<h3 class="wp-block-heading">Silver and platinum likely to advance</h3>



Gold’s poorer cousin, silver, could also see prices rise, especially as demand for solar power — silver is used in building solar panels — remains resilient and the metal’s supply stays limited.



“Both silver and platinum have strong underlying deficit fundamentals, and we think a catch up trade later in 2025, once base metals find firmer footing, could be quite potent,”&nbsp;JPMorgan analysts noted.&nbsp;



Silver is primarily utilized in industrial applications and is frequently incorporated in the production of automobiles, solar panels, jewelry and electronics. It is also needed in building artificial intelligence products and has military applications as well, said CIO of Swiss Asia Capital’s CIO Juerg Kiener.



That said, silver’s upside will be dependent on global industrial demand which will be impacted by Trump’s tariffs, precious metals trading services group MKS Pamp wrote in an outlook report.



<h3 class="wp-block-heading">Copper faces demand worries</h3>



Prices of copper, which is key to the manufacturing of electric vehicles and power grids, may see a dent after shooting to a record high this year on the back of a global energy transition.



“A potential deceleration in energy transition amid Trump’s policy shifts might dampen, to some extent, the ‘green sentiment’ that bolstered prices in 2024,” BMI wrote in a note.



While copper prices rose to a record high in May 2024 largely as a result of a squeezed market, they trended lower for the rest of the year, and will continue to do so, John Gross, president at the eponymous metals management consultancy John Gross and Company, told CNBC.



A cocktail mix of high inflation, elevated interest rates and a stronger dollar will weigh on all metals markets, the metals market veteran said.



<h3 class="wp-block-heading">Iron ore forecast to drop</h3>



Iron ore prices may also slide on the back of an oversupply resulting from Chinese policies and geopolitics.&nbsp;



“The expected U.S. tariffs on China, changing nature of Chinese stimulus and new low-cost supply [will] push the market into further surplus,” Goldman Sachs said, forecasting prices to decline to $95 per ton in 2025.



This despite China likely to import record amount of iron ore this year, according to Reuters. Iron ore prices fell over 24%, according to data from FactSet.



<h3 class="wp-block-heading">Cocoa and coffee</h3>



Cocoa and coffee prices stand out amongst the soft commodities basket, having scaled record highs in 2024 fueled by adverse weather conditions and supply tightness in key producing regions. But demand may taper in 2025.



“Given that these commodities are trading at levels well above cost of production, we expect production to expand and demand to contract in the coming year,” Rabobank researchers said.

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