The world’s fourth-biggest company, Google owner Alphabet, has announced a £5bn ($6.8bn) investment in UK artificial intelligence (AI).
The money will be used for infrastructure and scientific research over the next two years – the first of several massive US investments being unveiled ahead of US President Donald Trump’s state visit.
Google’s president and chief investment officer Ruth Porat told BBC News in an exclusive interview there were “profound opportunities in the UK” for its “pioneering work in advanced science”.
The company will officially open a $1bn (£735m) data centre in Waltham Cross, Hertfordshire, with Chancellor Rachel Reeves on Tuesday.
The investment will expand this site and also include funding for London-based DeepMind, run by British Nobel Prize winner Sir Demis Hassabis, which deploys AI to revolutionise advanced scientific research.
Ms Porat said there was “now a US-UK special technology relationship… there’s downside risks that we need to work on together to mitigate, but there’s also tremendous opportunity in economic growth, in social services, advancing science”.
She pointed to the government’s AI Opportunities Action Plan as helping the investment, but said “there’s still work to be done to land that”, and that capturing the upside of the AI boom “was not a foregone conclusion”.
Reeves said the investment was “a powerful vote of confidence in the UK economy” and showed “the strength of our partnership with the US”.
The US administration had pressed the UK to water down its Digital Services Tax on companies, including Google, in talks this year, but it is not expected to feature in this week’s announcements.
Further multi-billion-dollar UK investments are expected from US giants over the next 24 hours.
The pound has strengthened, analysts say, partly on expectations of interest rate changes and a flow of US investment.
On Monday, Google’s owner Alphabet became the fourth company to be worth more than $3 trillion in terms of total stock market value, joining other technology giants Nvidia, Microsoft and Apple.
Google’s share price has surged in the past month after US courts decided not to order the breakup of the company.
Google CEO Sundar Pichai had succeeded in making the company an “AI First” business, with Ms Porat saying, “it’s that performance which has resulted in that metric”.
Until this summer, Google had been seen to have lagged behind startups such as OpenAI, despite having pioneered much of the key research behind large language models.
Across the world, there has been some concern about the energy use and environmental impact of data centres.
Ms Porat said that the facility would be air-cooled rather than water-cooled and the heat “captured and redeployed to heat schools and homes”.
Google has also signed a deal with Shell to supply “95% carbon-free energy” for its UK investments.
In the US, the Trump administration has suggested that the power needs of AI data centres require a return to the use of carbon-intensive energy sources.
Ms Porat said that Google remained committed to building renewable energy, but “obviously wind doesn’t blow and the sun doesn’t shine every hour of the day”.
Energy efficiency was being built into “all aspects of AI” microchips, models, and data centres, but it was important to “modernise the grid” to balance off periods of excess capacity, she said.
Asked about fears of an AI-induced graduate jobs crisis, Ms Porat also said that her company was “spending a lot of time” focused on the AI jobs challenge.
“It would be naive to assume that there isn’t a downside. If companies just use AI to find efficiencies, we’re not going to see the upside to the UK economy or any economy.”
But, she said, entire new industries were being created, opening new doors, and in jobs such as nursing and radiology, adding: “AI is collaborating with people rather than replacing them.
“Each one of us needs to start using AI so you can understand how it can be an assistance to what you’re doing, as opposed to actually fearing it and watching from the sidelines,” she said.
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