Microsoft’s $3.2 billion UK investment to drive AI growth

LONDON (Reuters) – Microsoft’s plan to pump 2.5 billion pounds ($3.2 billion) into Britain over the next three years, its single largest investment in the country to date, will underpin future growth in artificial intelligence (AI), the UK government said.

Britain, where the economy is forecast to be sluggish in the coming years, is pushing for private investment to help fund new infrastructure, particularly in growth industries like AI.

The funding, first announced at a summit hosted by Prime Minister Rishi Sunak on Monday, will more than double Microsoft’s datacentre footprint in Britain, providing the infrastructure crucial for new AI models to work.

“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.

Microsoft’s plan comes despite comments by its president Brad Smith in April that a decision by the country’s antitrust regulator that went against the U.S. company put the tech industry’s confidence in Britain at risk.

Since then, the UK regulator waved through a restructured version of Microsoft’s $69 billion acquisition of Activision Blizzard, putting Britain back in Microsoft’s favour.

“Microsoft is committed as a company to ensuring that the UK as a country has world-leading AI infrastructure,” Smith said in the statement released as he hosted finance minister Jeremy Hunt at a datacentre being constructed in north London.

As part of the deal announced on Thursday, Microsoft will bring more than 20,000 of the most advanced Graphics Processing Units to Britain, tech which is key to machine learning and developing AI, the government statement said.

The investment includes a training plan to help ensure Britons have the skills they need to build and work with AI, it added.

($1 = 0.7911 pounds)

(Reporting by Sarah Young;Editing by Elaine Hardcastle)