Microsoft to invest $3.2 billion in the UK to accelerate AI growth

Microsoft is planning to invest a whopping 2.5 billion pounds (about $3.2 billion) in the United Kingdom over the next three years, making it Microsoft’s largest investment in the country to date. The funds will be directed towards boosting advancements in artificial intelligence (AI), the UK government said on Thursday.

The investment comes at a time when investors and VCs are pouring billions into top generative AI startups. According to PitchBook data, funding for generative AI startups reached $21.4 billion by September 30 this year, a significant increase from the $5.1 billion invested in 2022.

According to the announcement, a major aspect of this investment involves a training initiative geared towards ensuring that the British workforce possesses the necessary skills to engage with and construct AI technologies. With the UK’s economy predicted to face sluggish growth in upcoming years, there’s a strong push for private investment to bolster new infrastructure, particularly in burgeoning sectors like AI.

Initially revealed during a summit led by Prime Minister Rishi Sunak on Monday, this funding will significantly expand Microsoft’s data center presence in Britain. This expanded infrastructure is crucial for the effective operation of new AI models.

“Today’s announcement is a turning point for the future of AI infrastructure and development in the UK,” Sunak said in a statement on Thursday.

Interestingly, Microsoft’s commitment to this investment comes despite earlier concerns voiced by its president, Brad Smith, in April. At that time, Smith had expressed worries that a decision by Britain’s antitrust regulator posed a risk to the confidence of the tech industry in the country. However, subsequent approval of a revised version of Microsoft’s $69 billion acquisition of Activision Blizzard by the UK regulator reinstated Britain’s favorable position for the tech giant.

Smith emphasized the company’s dedication to establishing the UK as a leader in AI infrastructure during the announcement. This commitment was highlighted as he hosted Finance Minister Jeremy Hunt at a data center site under construction in north London.

In addition, as part of the investment pact, Microsoft will introduce over 20,000 highly advanced Graphics Processing Units (GPUs) to Britain. These GPUs play a pivotal role in machine learning and the evolution of AI, according to the government statement.

The announcement not only outlines financial support but also includes a comprehensive training program. This initiative aims to equip the British workforce with the necessary skills to engage in the development and implementation of AI technologies. Given the forecast of a sluggish economy in the upcoming years, the UK is actively encouraging private investments, especially in burgeoning sectors like AI, to stimulate growth.

Originally disclosed during a summit hosted by Prime Minister Rishi Sunak on Monday, this investment will see Microsoft more than double its data center footprint in Britain. The expansion of infrastructure is deemed crucial for supporting the functionality of new AI models, Reuters reported.

Expressing optimism about the impact of this investment, Sunak stated, “Today’s announcement is a turning point for the future of AI infrastructure and development in the UK.”

It’s noteworthy that Microsoft’s commitment to this substantial investment comes on the heels of concerns raised by its president, Brad Smith, in April. Smith had expressed reservations about the confidence of the tech industry in Britain after a decision by the country’s antitrust regulator that went against Microsoft.

However, the tide seemed to turn in Microsoft’s favor when the UK watchdog approved a restructured version of the company’s $69 billion acquisition of Activision Blizzard. As we reported back in October, Microsoft later sealed the Activision Blizzard deal after UK regulatory approval.

In reaffirming their commitment, Smith said, “Microsoft is committed as a company to ensuring that the UK as a country has world-leading AI infrastructure.” Smith made the statement while he was hosting Finance Minister Jeremy Hunt at a data center currently in the works in north London.

Meanwhile, Microsoft will introduce over 20,000 state-of-the-art Graphics Processing Units to Britain as part of the comprehensive investment plan. These advanced GPUs play a pivotal role in machine learning and the ongoing development of AI, according to the government’s official statement.