Technology Microsoft hands Britain £2.5bn digital boost

Microsoft hands Britain £2.5bn digital boost

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Microsoft has unveiled plans to invest £2.5bn in Britain as executives seek to draw a line under a feud with regulators over the $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 centre in North London and expand computer capacity in Cardiff.

The cash will be also used to train around 1m people in digital skills.

Brad Smith, Microsoft’s president, compared spending on data centres 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 the confidence in the Government and the country”.

The statement represents a thawing of relations between Microsoft and the UK after Mr Smith earlier this year criticised attempts by the Competition and Markets Authority (CMA) to block the Activision takeover.

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

However, he has since revealed the £2.5bn investment package after the CMA revisited its decision and waved through the takeover.

Microsoft said it was committed to doubling its data centre footprint in Britain as part of the funding, which will include building its largest UK facility based in North Acton, London. It will also invest in a site in Cardiff with further plans to expand in the North of England.

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

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

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

Mr Smith’s visit comes after a period of turmoil at OpenAI after its chief executive Sam Altman was ousted before making a dramatic return.

Microsoft, which was blindsided by Mr Altman’s sacking, had pushed for his return.

Despite its sway over the company as its biggest investor, Mr Smith said he did not “see a future where Microsoft takes control of OpenAI”.

As for the UK investment, the £2.5bn forms part of a broader £29.5bn 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 comes after Mr Hunt last week announced a further £500m investment in AI computer capacity for the UK after previous spending was earmarked to build new supercomputers in Edinburgh and Bristol, which Mr Smith called a “remarkably important” investment.

Mr Smith added there was still a need for “strong AI governance” in the UK and around the world, following Mr Sunak’s AI Safety Summit earlier this month at Bletchley Park.

He said: “We need to be determined and to build on the momentum that was generated at Bletchley Park.”

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