UK secures record US tech investments in AI and data centres amid strategic shifts

Microsoft and BlackRock reveal multi-billion-pound plans to invest in the UK’s data centre and AI sectors, signalling a new era of technological growth supported by government reforms and international collaboration.

Two major US corporations have unveiled ambitious plans to invest billions of pounds in the UK’s data centre and artificial intelligence (AI) infrastructure, marking a significant boost for the country’s technology sector amid a high-profile US presidential visit.

Microsoft committed to a historic $30 billion (£23.5 billion) investment spanning from 2025 to 2028, its largest ever in the UK. The investment will be split evenly, with $15 billion allocated for capital expenditure including new data centres and the development of what Microsoft describes as the UK’s largest supercomputer. This supercomputer, developed in partnership with Nscale, is expected to host over 23,000 Nvidia graphics processing units (GPUs), though details regarding site location, timelines, and procurement remain undisclosed. The remaining $15 billion will support operational growth covering software development, data centre operations, research, and sales across multiple UK locations. Microsoft currently employs approximately 6,000 people in the UK and contends that the country’s economic stability, regulatory clarity under the Labour government, and recent reforms in planning and electricity grid capacity were critical in securing this deal. Prime Minister Sir Keir Starmer described the announcement as a “powerful vote of confidence” in the UK’s AI capabilities, highlighting the government’s role in creating a supportive environment for large-scale technology investments.

Separately, BlackRock has confirmed plans to invest up to £500 million in UK data centre infrastructure, focusing on acquisitions rather than greenfield developments. Through its newly formed joint venture, Digital Gravity Partners—created with the operator Gravity Edge—BlackRock aims to target underutilised data centres with available power capacity, upgrading these mid-sized facilities to serve enterprise clients. This strategy, deployed through BlackRock’s recently closed €1.2 billion Europe Property Fund VI, reflects a different approach than hyperscale data centre investments, as it seeks to broaden the market by appealing to potential buyers such as real estate and infrastructure funds. BlackRock’s global co-head of real estate, Thomas Mueller-Borja, noted the investment’s focus on power availability in existing assets. The timing of these announcements coincided with US President Donald Trump’s UK state visit, which included key Wall Street and Silicon Valley executives such as BlackRock’s chief executive Larry Fink.

These plans coincide with a broader wave of technology investment in the UK. Nvidia announced plans for an £11 billion commitment to establish the UK as Europe’s largest GPU hub by 2026, deploying 120,000 advanced Blackwell GPUs in facilities supported by partners such as Nscale. This initiative complements Microsoft’s supercomputer project and forms part of a governmental strategy to develop AI growth zones and sovereign compute capacity within the UK. Furthermore, several US-backed initiatives underline the UK’s emerging role in AI infrastructure globally, including Stargate, a $500 billion AI infrastructure project supported by groups like SoftBank, OpenAI, and Oracle. Stargate has explored UK sites for its expansions, attracted by the country’s pro-innovation policies and enhanced electricity access. The UK’s appeal as a tech hub is further illustrated by other major investments, including Google’s £5 billion expansion and Nvidia’s declared intent to create Europe’s largest GPU cluster.

On a parallel front, private equity players such as Blackstone have secured approvals for expansive hyperscale data centre developments in Northern England, with a $13 billion project poised to create significant employment and contribute to regional economic growth. These large-scale facilities respond to soaring demand fueled by AI advancements and cloud computing growth, which require substantial power and computing resources. The UK’s evolving planning policies and increased grid capacity have been cited as vital enablers for these developments.

Not all investments are fresh greenfield builds; BlackRock’s recent acquisition of UK data firm Preqin for £2.55 billion earlier this year signifies an expansion into alternative data markets, complementing its existing Aladdin technology platform. The Preqin deal is expected to enhance BlackRock’s data capabilities and reflects a growing trend of integrating data services within financial technology infrastructure.

Together, these investments underscore a pivotal moment for the UK’s AI and digital infrastructure sectors, positioning the country as a significant hub for cloud computing, AI research, and enterprise data management. Industry leaders credit a combination of government reforms, regulatory clarity, and increased electricity grid support for enabling this surge. Microsoft CEO Satya Nadella emphasised the strength of UK-US tech ties and the strategic importance of supporting major UK clients such as Barclays, the NHS, Vodafone, and the London Stock Exchange Group, all of which are expanding their use of AI-powered tools.

While the bulk of major investments remain US-driven, many projects have a global dimension, involving partnership entities and investment funds from regions as varied as the Middle East and Europe. This international collaboration further underscores the UK’s growing role as a nexus in global AI infrastructure development.

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Source: Noah Wire Services