Microsoft to spend £2.5bn on AI computers in UK

But will constitute just 3% of the software giant’s total spending on datacentres in the next six years

AI demand pushes Microsoft to double UK datacentre footprint and prepare a “multi-million pound” investment in training.

Prime minister Rishi Sunak claimed some credit yesterday for a Microsoft plan to invest £2.5 billion expanding its UK datacentre sites to meet demand for AI computer services, and help train a million people to use them.

The announcement comes just weeks after the UK helped stave off swingeing regulation of artificial intelligence led by the EU, by formulating a global agreement on a declaration of AI safety that reflected its own innovation-friendly, light-touch plan for guidance, rather than strict rules.

"The UK started the global conversation on AI earlier this month," Sunak said in a statement celebrating the Microsoft investment yesterday.

"Microsoft's historic investment is further evidence of the leading role we continue to play in expanding the frontiers of AI to harness it's economic and scientific benefits," he said.

However, the £2.5 billion Microsoft has committed appears to be a fraction of the $75.1 billion it has secured in loans to open new datacentres in the next six years, according to its most recent financial statement. The UK, as one of the world's 10 largest economies, will get 3% of the total.

Microsoft spends about $64 billion a year operating existing datacentres and offices around the world. Its two existing UK datacentre sites, in London and Cardiff, constituted about 5% of its global data infrastructure when Computing last analysed it in May.

Excluding the UK, almost 20% of Microsoft's datacentres were in Europe, while the majority - 40% - were in Asia. The US alone has 30% of the total.

The UK investment follows recent announcements in Australia and Canada, where Microsoft said it would spend £2.5 billion and £400 million respectively, building data centres and investing in skills. Government ministers in Australia said the investment was a testament to their tenure in power.

Microsoft opened its datacentre campuses in London and Cardiff in 2016 for the sake of hosting cloud computing services and delivering its own Office 365 software packages over the wires. The sudden emergence of AI has since increased demand for computing facilities.

Microsoft's £2.5 billion investment would double its UK datacentre capacity to meet AI demand, and would be the largest investment it had ever made in the UK. It would also "possibly" use some of the money to build datacentres in "northern England".

The firm's commitment to make "a multi-million-pound investment to train one million people" to use its AI services neglected to say whether or how much of the money would go to fund skilled apprenticeships, and how much would be spent setting up and administering introductory courses.

Microsoft would create "the first" Professional Certificate on Generative AI, it said. Its investment in training would also help people "build AI fluency" and develop "technical AI skills". It would also show businesses how to "transform" to use its AI services.

Large datacentre operators and big tech firms have been committing hundreds of millions and even billions of dollars at a time in building and expanding their computing infrastructure in major cities around the world as industries and societies use more cloud computing services.