US tech giant to plough £22bn into Britain

Microsoft president Brad Smith says the UK is primed to benefit economically from AI - Yves Herman/Reuters

Microsoft has announced plans to invest a record £22bn in the UK as Donald Trump touches down for his state visit.

In its biggest-ever commitment to Britain, the US technology giant said it would spend billions on infrastructure, including the country’s most powerful artificial intelligence (AI) supercomputer.

President Trump arrived in the UK on Tuesday for a three-day trip.

The King, whom the US president hailed as a “friend” on the eve of the event, and the Queen will greet him and the first lady with a ceremonial welcome at Windsor Castle.

President Trump will be presented with the largest guard of honour ever at a state visit. He will join the King for a carriage procession, and UK and US F-35 fighter jets will conduct a first-ever joint flypast.

Sir Keir Starmer is set to unveil a tech deal with Mr Trump during his visit to Britain, in what the Prime Minister said “marks a generational step change in our relationship with the US”.

Technology titans, including Jensen Huang, the boss of Nvidia, the world’s most valuable company, will attend a state banquet at Windsor Castle on Wednesday evening with Mr Trump and the King.Nvidia chief Jensen Huang (right) will attend a state banquet at Windsor Castle on Wednesday - Tolga Akmen/Shutterstock

Sir Keir will be hoping the “tech prosperity deal” can ease the intense pressure on him following the resignation of his deputy prime minister, Angela Rayner, and the sacking of Lord Mandelson as his ambassador to the US over the last fortnight.

Steel deal

On Tuesday, reports said that Sir Keir had abandoned hopes of negotiating zero tariffs on British steel sold to the US despite claiming to have already achieved the feat.

Downing Street said when the US-UK trade deal was struck in May that Sir Keir had “negotiated the 25pc tariff down to zero, meaning UK steelmakers can carry on exporting to the US”.

Instead, Sir Keir now hopes to strike a “permanent” 25pc deal, half what is paid by other countries, according to the Financial Times.

Speaking before he boarded Air Force One to fly to Britain on Tuesday, Mr Trump appeared to hint that the trade deal with the UK could be improved, saying he was open to “refining” the agreement.

“They want to see if they can refine the trade deal a little bit,” he said. “We made a deal, and it’s a great deal. And I’m into helping them.”The recently sacked UK ambassador to the US Lord Mandelson (right) helped draw up a ‘tech prosperity deal’ with President Trump - Bonnie Cash/Bloomberg

The “tech prosperity deal” will see the US and UK collaborate on cutting-edge technologies such as AI, quantum computing and advanced nuclear.

Britain and the US will also announce closer cooperation on cryptocurrencies, The Financial Times reported.

Lord Mandelson was closely involved in drawing up the plan, having argued that such an agreement was needed to counter the “clear shared threat” from China.

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The Prime Minister is braced for Mr Trump to be asked about the sacked ambassador on Thursday, when the two leaders hold a press conference.

‘Hospitable climate’

Microsoft, whose chief executive Satya Nadella will join Mr Trump on the visit, said the majority of its £22bn investment will go on IT infrastructure such as data centres, the huge computing hubs required for artificial intelligence.

Brad Smith, Microsoft’s president, said the UK was primed to benefit economically from AI and praised the Government for attracting overseas investment.

His comments mark a sharp departure from two years ago, when he said Britain was a worse place to start a business than Europe after regulators blocked his company’s takeover of video game company Activision Blizzard.Microsoft chief Satya Nadella will join Mr Trump on his state visit - Chesnot/Getty Images

“The climate in London today is so much more hospitable to investments than it was a few years ago, as long as that balance can be retained it will bode well for substantial investments from a company like ours,” Mr Smith said.

“I haven’t always been optimistic every single day about the business climate in the UK, but I am very encouraged by the steps the Government has taken over the past few years.”

Mr Smith endorsed Sir Keir’s hope that AI will reinvigorate Britain’s economy, saying it “bodes well for an accelerating economic growth rate for the United Kingdom”.

Microsoft’s announcement forms part of £31bn in investments by US tech companies announced by the PM.

Other deals include a £5bn commitment by Google and plans from OpenAI, the maker of the chatbot ChatGPT, to open a “Stargate” AI hub in Newcastle.

Satya Nadella, Microsoft’s chief executive, said the investments “mark a decisive step towards the UK becoming a world leader in AI”.

Microsoft’s plans include using an AI data centre in Essex that is being built by the British developer Nscale, which the company says will be Britain’s largest supercomputer.

Nvidia, whose semiconductor technology has powered the AI boom and turned it into the world’s first $4tn (£2.9tn) company, said it planned to deploy 120,000 of its chips in the UK, the most of any European country.

Mr Huang said Britain was in a “Goldilocks” position in AI thanks to abundant talent and research.

“We are at the big bang of the AI era,” he said.