Microsoft says its £2.5bn UK investment will enable more than a million people to gain crucial skills in the burgeoning sphere of artificial intelligence (AI).

The US tech firm’s president, Brad Smith said its three year programme led by datacentre expansion from 2026 was “the most important infrastructure of the second quarter of the 21st century.”

Training and partnership programmes, the latter concentrating on AI safety and research with government and universities, are the other major elements.

Speaking on a visit to the construction site for the new London datacentre, chancellor Jeremy Hunt said it was a “massive day in the UK’s ambition to be the next Silicon Valley” and a “massive vote of confidence by Microsoft who do think the UK is going to be the next Silicon Valley.”

The £2.5bn investment was announced earlier this week as part of almost £30bn in foreign direct investment secured by the government ahead of its Global Investment Summit.

Under details released on Thursday, the Treasury said Microsoft was bringing more than 20,000 of the most advanced Graphics Processing Units (GPUs) – crucial for machine learning and the development of AI models – to the country.

“This is the single largest investment in its 40-year history in the country which will see Microsoft grow its UK AI infrastructure across sites in London and Cardiff and potential expansion into northern England, helping to meet the exploding demand for efficient, scalable and sustainable AI specific compute power,” the statement said.

Mr Smith said during a tour of the London site: “In this five storey complex there will be put the world’s most advanced computer chips, the servers, they will provide the AI infrastructure for much of the UK.

“And we’re doing this in London, in Cardiff, in all probability in Northern England. What we’re announcing today is Microsoft is investing £2.5bn in the next three years to build that infrastructure and then combining that with a programme to provide AI skills to more than a million people.”

The deal was confirmed a few months after the company had questioned whether the UK was a place to do business.

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It had appealed for ministers to intervene after its initial £55bn takeover of Call of Duty video games maker Activision Blizzard was blocked by the Competition and Markets Authority (CMA) in April.

The regulator later, and unusually, U-turned on its opposition when Microsoft offered a new remedy following the final ruling.

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The government has always denied any interference.

Mr Hunt said of Microsoft’s investment: “The UK is the tech hub of Europe with an ecosystem worth more than that of Germany and France combined – and this investment is another vote of confidence in us as a science superpower.

“And it follows the £500m investment in Compute that I committed to in my autumn statement last week, taking our investment in advanced computing for AI to £1.5bn – a down payment on the jobs and economic growth it will bring to the UK.”

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