Microsoft announces new London AI hub

New hub is part of ongoing £2.5bn investment in UK

Microsoft will open a new London hub to expand the company’s AI capabilities.

According to a blog post by recent hire and Deepmind founder Mustafa Suleyman, Microsoft AI London will "drive pioneering work to advance state-of-the-art language models and their supporting infrastructure, and to create world-class tooling for foundation models."

The new AI hub will be based in Microsoft's Paddington offices and will be led by AI scientist and engineer Jordan Hoffman. Hoffmans' credentials are impeccable, having honed his talents at Deepmind and Inflection.

Microsoft did not specify how many jobs would be created by the new AI hub, although Suleyman's post says that the company will be seeking exceptional individuals to work on the most "challenging AI questions of our time."

The announcement is interesting, in both content and timing.

Microsoft announced late last year that it plans to spend £2.5 billion expanding AI datacentre infrastructure in the UK. It plans to grow its datacentre footprint across sites in London and Wales and potentially into the north of England.

Whilst several tech companies such as Apple threatened last year to quit the UK, primarily due to regulations such as the Online Safety Bill, Microsoft is one of a growing list of tech companies who have set up AI units in London.

OpenAI, owned of course by Microsoft, established its first overseas office in London, while US firm C3.ai relocated its European headquarters from Paris to London.

However, it was only last July that Suleyman, pre-Microsoft was explaining to the BBC why he was choosing to base Inflection AI in California, stating that the UK didn't offer the same opportunities for growth that the US did.

"I think the culture shift that it needs to make is to be more encouraging of large-scale investments, more encouraging of risk taking, and more tolerant and more celebratory of failures," he said.

"The truth is, the US market is not only huge, but also more predisposed to big risk taking, taking big shots and having big funding rounds."

Microsoft CEO Brad Smith also expressed discontent last year when the CMA held up the acquisition of Activision by the tech giant. That was cleared last October and since then, Microsoft seems more positive about the potential of the UK as a home for AI innovation. Certainly, the UK's universities and research institutions continue to act as a rich source of AI engineering talent.

Suleyman said in his announcement:

"As a British citizen, born and raised in London, I'm proud to have co-founded and built a cutting-edge AI business here. I'm deeply aware of the extraordinary talent pool and AI ecosystem in the U.K., and I'm excited to make this commitment to the UK on behalf of Microsoft AI. I know – through my close work with thought leaders in the UK government, business community and academia – that the country is committed to advancing AI responsibly and with a safety-first commitment to drive investment, innovation and economic growth."

Heather Dawe, Chief Data Scientist at UST UK believes that the announcement reflects the UKs edge when it comes to innovation. It is also indicative of a fight for talent.

"Combined with the presence of other AI giants such as Meta, London's reputation for AI start-ups and scale-ups, alongside the UK's rich and deep pool of data science and AI talent (outside of London the wider UK's AI hotbeds include Cambridge and Leeds) makes the UK a leading hub for AI innovation globally," Dawe comments.

"The move by Microsoft to open its new AI division in London marks the start of what will likely be a major talent war between Google, Microsoft and the many other AI companies with development centres in the city. This is of course good news for all the data scientists, AI engineers and similar talent who live in and around London and the wider UK. It's also going to make it harder for Google and similar incumbents to attract and retain its UK based workforce, particularly in the AI space."