30 November 2023
If you are covering Microsoft’s £2.5bn investment in UK artificial intelligence infrastructure, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Microsoft’s investment in artificial intelligence in the UK completes a reversal of fortunes for the relationship between the government and the tech giant. Things appeared at rock bottom during the takeover of Activision Blizzard and Microsoft made its feelings clear on just how open the UK appeared to be for foreign business investment. This marks a complete turnaround in attitudes and suggests things are now back on a steady footing and the two parties can work collaboratively once again.
“Ultimately, this investment is great news for the UK and its ambitions to be a leader in artificial intelligence. As the industry grows and matures, the government is going to want the leading firms operating and developing their tech in the UK and help boost the British tech industry at a time when perceptions of the UK market remain downbeat. Microsoft is one of, if not the biggest winner in the artificial intelligence race, so this is a real boon for the government. With Nvidia also making noises of investing in its AI capability in the UK, Rishi Sunak and Jeremy Hunt will want to strike while the iron is hot.
“However, for Microsoft, this investment needs to be seen in the context of its overall operations. At just over $1bn per year, this investment pales in comparison to Microsoft’s wider capex budget of $40bn per year. As such, it is a fairly low risk play for Microsoft and is unlikely to move the needle as much as it does for the UK government. What it is clearly trying to achieve, however, is a global footprint on AI so when regulation does develop it will be in a very good position.”
