The investment, which is Microsoft’s largest ever in the UK and comes at the beginning of a two-day state visit by US president Donald Trump, will expand the company’s data centre footprint in the UK to meet growing AI demand and adoption from customers.

The funding also includes $15bn in capital expenditures to build out the UK’s cloud and AI infrastructure, with plans to build the country’s largest supercomputer – with more than 23,000 Nvidia GPUs – in partnership with Nscale.

In addition, the funding will support ongoing work across Microsoft’s 6,000-strong workforce. The company is already working to train more than one million people in AI skills in the UK and has carried out research programmes through Microsoft Research in Cambridge and Microsoft AI in London.

Prime Minister Keir Starmer said: “Microsoft’s landmark investment is a powerful vote of confidence in UK’s leadership in AI and cutting-edge technology.

“This commitment will not only strengthen our digital infrastructure and support thousands of highly skilled jobs, but also ensure Britain remains at the forefront of global innovation as we deliver on our Plan for Change.

“We are proud to partner with world-leading companies like Microsoft to build a future powered by British ingenuity and ambition.”

Brad Smith, vice-chair and president at Microsoft, said: “Our ability to make an investment of this size is based in no small measure on the work the government is doing to reform planning, grow electricity capacity, and foster a more stable and open regulatory environment.

“For AI to fully realise its potential, businesses need clarity and predictability in how they can deploy their investments, and people need confidence that these technologies are being developed and deployed responsibly – not just to build trust, but to ensure that those creating and investing in AI have the confidence to continue to do so.”

Smith added: “As AI reshapes industries and unlocks new possibilities, we believe that trusted American technology – built on principles of security, transparency, and responsibility – can help empower UK institutions and businesses to lead with confidence.

“In doing so, we’re investing in a partnership that continues to deliver opportunity, innovation and impact in both directions.”