- Microsoft and Google just announced multi-billion dollar investments in AI infrastructure in the U.K.
- The news follows similar investments from a range of other cloud players
- The U.K. is aiming to build itself into an AI powerhouse but faces challenges
The U.K. appears poised to become an AI powerhouse, with Microsoft and Google both announcing blockbuster infrastructure investments in the country.
Google was first out of the gate, revealing a newly opened data center in Waltham Cross as part of a two-year $6.8 billion (£5 billion) investment it is making in the country. The investments include capital expenditure dollars as well as R&D and engineering costs, and it is designed to help boost the U.K.’s AI economy.
Not to be outdone, Microsoft swiftly followed with an investment announcement of its own. The hyperscaler is pumping $30 billion (£21.9 billion) over the course of the next four years, with half going to the construction of new cloud and AI infrastructure (including data centers) as well as a 23,000-GPU supercomputer.
“As AI reshapes industries and unlocks new possibilities, we believe that trusted American technology — built on principles of security, transparency, and responsibility — can help empower UK institutions and businesses to lead with confidence,” Microsoft Vice Chair and President said in a statement.
The news comes as U.S. President Donald Trump visits the U.K., and after AWS’ announcement a year ago that it plans to spend $10.9 billion (£8 billion) through 2028 on the construction and operation of data centers in the country. CyrusOne, ServiceNow, Cloud HQ and CoreWeave also collectively pledged U.K. AI investments totaling $8.6 billion (£6.3 billion).
Analyst takes
The U.K. is clearly positioning itself as a critical AI hub, Dell’Oro Group Research Director Alex Cordovil noted on LinkedIn. But he told Fierce by email that these announcements can’t be viewed in isolation. They come alongside other investments across Europe, he said, including the Stargate Norway project and the EU giga AI factory initiative.
“The U.K. has important advantages to take leadership in AI data centers in Europe, but also has structural challenges,” Cordovil said. “Some are particular to the U.K., such as high energy prices, but others are shared with many other markets vying for that leadership position in Europe—especially power availability and workforce shortages.”
Moor Insights and Strategy Founder and Chief Analyst Patrick Moorhead made a similar point. "They have a good shot at competing globally with the Middle East, but their challenge is energy," he told Fierce. "Energy is very expensive in the U.K., and in the ME it's very cheap. Therefore, the cost per token will be higher. The challenge in the ME is experience."
AI ambitions
Like the U.S. with its AI Action Plan, the U.K. in January detailed its roadmap to prepare for the AI future. Its AI Opportunities Action Plan called for a massive expansion of the country’s sovereign compute muscle and the creation of AI Growth Zones with “enhanced access to power and support for planning approvals.”
At the time, the U.K. government stated it would “seek a private-sector partner who would develop one of the U.K.’s largest AI data centers, beginning with 100MW of capacity and with plans to scale up to 500MW.” It is not clear, though, whether Microsoft's or Google’s investments are tied to that promise.