Microsoft has committed £2.5 billion ($3.2 billion USD) to expanding its artificial intelligence capabilities in the U.K. as part of plans to fuel the country’s AI sector.

The investment, announced by the U.K. government on November 30, will see Microsoft more than double its AI data centre footprint in Britain over the next three years and deliver AI-related training to more than one million people. The company will also supply more than 20,000 graphic processing units for the country’s “next-generation” AI infrastructure and expand its Accelerating Foundation Models Research programme to give the U.K. researchers and scientists priority access to its AI foundation models.

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Details about how Microsoft’s UK AI investment will be used

Expansion of Microsoft data centre sites

The money will be used to fund the expansion of Microsoft data centre sites in the U.K. capital of London, as well as in the city of Cardiff, Wales, with the possibility that this will be extended into the north of England to help “meet the exploding demand for efficient, scalable and sustainable AI specific compute power,” as stated in the news release.

Azure-based gen AI resources for U.K. university researchers

In addition, researchers from leading U.K. universities, including Cambridge, Oxford, Imperial College, UCL, Bath and Nottingham, will be given prioritized access to Microsoft’s Azure-based generative AI resources for scientific research and discovery. This will be facilitated via Microsoft’s AFMR programme, an initiative launched by the company in October 2023 in partnership with leading universities to accelerate research around foundation AI models.

AI fluency, technical skills and safety training for 1m+ people

To support U.K. workers across the AI economy, Microsoft will make a “multi-million pound investment” to provide AI skills training to more than one million people.

It is hoped that this will boost the U.K.’s AI sector – said to employ some 50,000 people and contribute £3.7 billion ($4.7 billion) to the country’s economy – by helping more people move into AI and data-related career fields.

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The programme will be delivered by Microsoft alongside other “learning and non-profit partners” and will focus on areas such as AI fluency, technical skills, safe and responsible AI development and AI business transformation.

“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,” said Microsoft vice chair and president Brad Smith in the U.K. government’s post.

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In a Microsoft blog post, Smith elaborated that the company would “turn all the lessons it has learned in operationalizing responsible AI principles for its own AI engineers and developers, into learning modules for UK customers and partners.”

This will enable U.K. AI developers to build safer and more secure systems, Smith said – a key theme of the new Guidelines for Secure AI System Development published by the U.K.’s National Cyber Security Centre, the U.S.’s Cybersecurity and Infrastructure Security Agency and other agencies in late November 2023.

Microsoft’s biggest investment in the U.K. to date

Microsoft’s multi-billion-pound investment in British AI represents the biggest investment the Redmond-based company has made in the 40 years it has been operating in the U.K., said Microsoft UK CEO Clare Barclay in the press release about this news.

Michelle Donelan, the U.K. secretary of state for science, innovation and technology, labeled Microsoft’s investment “a huge vote of confidence in the strength of the UK’s technology sector,” which employs more than 1.7 million people and adds £150 billion ($189 billion) to the U.K. economy each year, according to data from techUK.

“This investment not only bolsters critical infrastructure but also ensures that the UK remains at the forefront of driving economic growth and innovation,” Donelan said in the government announcement.

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A positive shift following recent Microsoft/CMA news

Microsoft’s £2.5 billion down payment on U.K. AI also points to a warming of the relationship between the tech company and the sovereign state after the U.K.’s independent Competition and Markets Authority initially blocked Microsoft’s $69 billion acquisition of Activision Blizzard in April 2023, prompting Smith to hit out against the decision. On Oct. 13, 2023, the acquisition was approved: “The CMA decided to grant consent under paragraph 12 of the Microsoft and Activision Merger Inquiry Order 2023 for Microsoft to acquire Activision, excluding Activision’s non-EEA cloud streaming rights,” the approval document read.

Microsoft was once again referred to the CMA in October this year over concerns about its influence in the U.K. cloud market. A subsequent investigation, which will involve reviewing whether the cost of migrating data out of cloud platforms stifles competition in the sector, is expected to last until April 2025.

Sunak: A turning point for UK AI

Microsoft’s cash injection follows a £500 million ($631 million) investment set aside for AI in the U.K. government’s Autumn Statement, bringing its total planned public investment in advanced computing to more than £1.5 billion ($1.9 billion).

In the government’s announcement, U.K. prime minister Rishi Sunak called the latest investment by Microsoft “a turning point for the future of AI infrastructure and development in the UK,” while chancellor Jeremy Hunt drew comparisons between AI investment in the U.K. and elsewhere in Europe, suggesting that the country was “the tech hub of Europe with an ecosystem worth more than that of Germany and France combined.”

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The news comes as Sunak’s government makes a concerted effort to draw private investment into the U.K.’s technology industry and cement the country’s reputation as a global leader in artificial intelligence.

In November 2023, the U.K. played host to the first AI Safety Summit, where world leaders pledged to work together to ensure the safety of new and advanced artificial intelligence models. The AI summit was attended by government officials from some 28 countries as well as representatives from leading tech companies, including Elon Musk. A key outcome of the event was the signing of the Bletchley Declaration, and with it came an agreement that tech companies must share the responsibility of testing the safety of AI models with governments.

“The UK started the global conversation on AI earlier this month, and Microsoft’s historic investment is further evidence of the leading role we continue to play in expanding the frontiers of AI to harness its economic and scientific benefits,” said Sunak.