Microsoft is investing $30 billion in UK AI infrastructure

Microsoft is committing £22 billion (approximately $30 billion) to the United Kingdom over the next three years in what is being billed as one of the most significant tech sector investments in the country’s history. The multibillion-dollar plan, set to run from 2025 through 2028, will finance both new infrastructure and ongoing operations, with a major focus on artificial intelligence.

Building the UK’s Largest Supercomputer

A central feature of the investment is $15 billion in capital expenditures to construct the UK’s largest AI-focused supercomputer. Developed in partnership with Nscale, the system will feature more than 23,000 advanced GPUs, designed to meet growing AI demand and accelerate adoption across industries.

“We’re focused on British pounds, not empty tech promises,” said Brad Smith, Microsoft vice chair and president, during a press briefing attended by The Verge. “It’s easy to have big numbers, but we’ll be good for every cent of this investment.”

Smith emphasized that the investment builds on Microsoft’s existing UK infrastructure, including its network of data centers, which will also be expanded as part of the project.

Outpacing Rivals, Signaling US-UK Cooperation

The announcement arrives just hours after Google revealed its own £5 billion ($6.8 billion) UK AI investment and a new data center in Waltham Cross, Hertfordshire. While both tech giants frame their commitments as long-term bets on the UK’s AI leadership, Microsoft’s £22 billion dwarfs Google’s contribution.

“This will account for more than two-thirds of the tech sector’s total investment announcements in the UK that are being made this week,” Smith noted.

The timing is also politically significant. Microsoft’s announcement coincided with President Donald Trump’s second state visit to Britain, underscoring the growing emphasis on US-UK collaboration in advanced technology. Smith clarified that the investment was not requested by the Trump administration but acknowledged the alignment with UK government priorities.

From Friction to Partnership

The announcement marks a stark shift in Microsoft’s relationship with UK regulators. During the company’s contentious Activision Blizzard acquisition in 2023, Smith harshly criticized the Competition and Markets Authority (CMA), saying his confidence in the UK had been “severely shaken” when the deal was initially blocked. At the time, he even suggested the European Union was a more attractive business hub.

Since then, relations have thawed. Smith later described the CMA as “tough and fair” and admitted he “might choose slightly different words” to express earlier frustrations.

In his briefing, Smith praised both former Prime Minister Rishi Sunak and current Prime Minister Keir Starmer for creating conditions that made this new investment possible. He cited reforms in planning, growth in electricity capacity, and a more stable regulatory framework as enabling factors.

A Boost for the UK Economy and Workforce

UK leaders were quick to welcome Microsoft’s decision. Prime Minister Starmer described it as “a powerful vote of confidence in UK’s leadership in AI and cutting-edge technology,” echoing Chancellor Rachel Reeves’ earlier comments on Google’s investment.

While half of Microsoft’s £22 billion commitment is earmarked for infrastructure, the other half will support ongoing operations, including its 6,000-strong UK workforce. The company maintains a presence across the country, with hubs such as Microsoft Research in Cambridge, Microsoft AI in London, and its UK headquarters in Reading.

The announcement comes despite some retrenchment earlier this year, when Microsoft shuttered its 21,000-square-foot flagship London store. Still, Smith’s comments make clear the company sees Britain as a critical base for its AI ambitions.

The Bigger Picture

With both Microsoft and Google making billion-pound bets on the UK, Britain is positioning itself as a leading AI hub outside the United States and China. Microsoft’s supercomputer project, in particular, could serve as a catalyst for research, industry adoption, and public-private partnerships.

As Smith put it: “We’re not just investing in the UK, we’re investing with partners in the UK.”