February 24, 2024
Microsoft signals ‘vote of confidence’ in UK with £2.5bn investment


Microsoft has unveiled plans to invest £2.5bn in Britain as officials try to draw a line under a dispute with regulators over its $69bn (£47bn) takeover of video game maker Activision.

The US tech giant said the investment package signals a “vote of confidence” in the UK and will be used to build a new data center in north London and expand computer capacity in Cardiff.

The cash will also be used to train about 10 lakh people in digital skills.

Microsoft President Brad Smith compared spending on data centers to the “canals and railroads” that emerged during the Industrial Revolution, as he said they will serve as critical infrastructure for artificial intelligence (AI).

Mr Smith, who is due to meet Chancellor Jeremy Hunt on Thursday, said the investment was a “real vote of confidence” in Britain and “a reflection of confidence in the government and the country”.

The statement represents a deterioration in relations between Microsoft and the UK after Mr Smith criticized Competition and Markets Authority (CMA) efforts to block the Activision acquisition earlier this year.

He said the CMA’s initial decision was “bad for Britain”.

However, they have revealed a £2.5bn investment package after the CMA reconsidered its decision and approved the takeover.

Microsoft said it is committed to doubling its data center footprint in the UK as part of the funding, which will include the construction of its largest UK facility, located in North Acton, London. It will also invest in a site in Cardiff with plans to expand into the north of England.

The tech giant will also invest in 20,000 AI processors, which is crucial for powering popular software like digital chatbot ChatGPIT. Microsoft, the developer of ChatGPT, is the largest investor in OpenAI.

Microsoft said scientists will receive priority access to the new infrastructure.

Mr Smith said it was “too early to say” whether the investment climate is better in Europe or the UK, but he said the UK had an “extraordinary opportunity around science”.

Mr Smith’s visit follows a period of turmoil at OpenAI, when its chief executive Sam Altman was ousted before a dramatic comeback.

Microsoft, which was shocked by Mr. Altman’s dismissal, had pressed for his return.

Despite its dominance as the company’s largest investor, Mr Smith said he did not see “a future where Microsoft takes control of OpenAI”.

As far as UK investment is concerned, the £2.5 billion is part of a wider £29.5 billion package of deals announced by Rishi Sunak as part of his global investment summit.

The Prime Minister said Microsoft’s investment was “a turning point for the future of AI infrastructure and development in the UK”.

The Microsoft deal follows Mr Hunt’s announcement last week of an additional £500 million investment in AI computer capacity for the UK, while previous spending was earmarked to build new supercomputers in Edinburgh and Bristol.

Source: uk.finance.yahoo.com

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