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Google has said it will invest £5bn in the UK in the next two years to help meet growing demand for artificial intelligence services, in a boost for the government.
The investment, which comes as Google opens its new datacentre in Waltham Cross in Hertfordshire, is expected to contribute to the creation of thousands of jobs, the US tech company said.
The chancellor, Rachel Reeves – who is attempting to drive growth amid pressure over the lacklustre state of the UK economy - said the investment into research and development, capital expenditure and engineering was a “vote of confidence” in the UK economy.
The US president, Donald Trump, begins his official state visit to the UK on Tuesday, and the ChatGPT parent firm, OpenAI, and the chip designer Nvidia will this week also reportedly announce billions of dollars’ worth of investment into British datacentres.
On Tuesday, Google said it would pump £5bn into capital expenditure, research and development, and related engineering over the next two years, which would include “pioneering” AI research in science and healthcare through its Google DeepMind operation.
The Silicon Valley company said the investment would help the UK grow its AI economy and contribute to technological breakthroughs, improvements in cybersecurity and job creation.
Google predicted the investment would help to create 8,250 jobs annually at UK businesses.
Reeves will officially open the company’s first UK datacentre in Waltham Cross on Tuesday, amid growing demand for Google’s Cloud, Workspace, Search and Maps services.
Google said it would partner with Shell to help it manage its renewable energy supply in the UK.
The Guardian reported on Monday that a new Google datacentre in Essex was expected to emit more than half a million tonnes of carbon dioxide a year.
Reeves will also host the bosses of top US and UK financial companies in Downing Street on Tuesday. The meeting, which will be hosted jointly by the US Treasury secretary, Scott Bessent, will be attended by senior figures from BlackRock, Barclays and Blackstone.
Trump will make a two-day visit to the UK, which will include a series of business events, as well as a state banquet with tech bosses and senior cabinet ministers on Wednesday evening. The US president will then travel to Chequers on Thursday for a business reception, working lunch and press conference with Keir Starmer.
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Google’s £5bn investment comes amid a wider increase in its capital expenditure budget, with the company telling investors in July it expected to invest about $85bn in its 2025 financial year, compared with a previous estimate of £75bn.
On Monday, its parent company, Alphabet, became the fourth business to surpass a market capitalisation of $3tn, joining fellow tech companies Nvidia, Microsoft and Apple.
Alphabet shares rallied strongly earlier this month after a court ruling that avoided the harshest ruling sought by US competition regulators, including the forced sale of its Chrome browser.
Reeves said: “Google’s £5bn investment is a powerful vote of confidence in the UK economy and the strength of our partnership with the US, creating jobs and economic growth for years to come.
“This government is reversing decades of underinvestment that has held us back for too long, by slashing burdensome red tape, delivering bold reforms of the planning system and investing in better tech to unlock better jobs and opportunities.”
The Google DeepMind co-founder and chief executive, Demis Hassabis, said: “We founded DeepMind in London because we knew the UK had the potential and talent to be a global hub for pioneering AI.
“The UK has a rich history of being at the forefront of technology – from Lovelace to Babbage to Turing – so it’s fitting that we’re continuing that legacy by investing in the next wave of innovation and scientific discovery in the UK.”
