Microsoft has unveiled plans to invest £2.5 billion into building datacentres for AI in the UK in a boost to the country's credentials of becoming a major European artificial intelligence hub.
The funding, which will be spread over three years will involve bringing more than 20,000 advanced Graphics Processing Units (GPUs) - which are crucial for machine learning and the development of AI models - to the UK by 2026, across sites in London, Cardiff and 'potential expansion into northern England'.
The development of AI models requires vast amounts of information on which they are trained, for which large-scale data centres are essential. The UK lags well behind the US in terms of data centre capacity, with only around a sixth of the number of centres, according to a 2021 study by the US government.
The move adds to Microsoft's expanding AI presence in the UK, after Open AI, in which it is a major investor, opened its first overseas office in London earlier this year.
Prime Minister Rishi Sunak said: “Microsoft are one of the founding fathers of modern technology and today’s announcement is a turning point for the future of AI infrastructure and development in the UK.
Microsoft acquired a former radiator factory building in March last year, according to news website Business Live, and last month sought planning permission to convert it into a datacentre.
The investment, which is the single-largest commitment in the company's 40-year history, marks a dramatic turn from Microsoft's less-than-cheery attitude towards UK investment after its merger deal with Activision was initially blocked by the UK competition regulator earlier this year.
Microsoft vice chair and President Brad Smith had said of the move: "“This decision, I have to say, is probably the darkest day in our four decades in Britain...it does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.”
But Smith said today: "Microsoft is committed as a company to ensuring that the UK as a country has world-leading AI infrastructure, easy access to the skills people need, and broad protections for safety and security."
According to the Treasury, the UK’s AI sector contributes £3.7 billion to the UK economy and employs 50,000 people across the country.
