‘a powerful vote of confidence in the UK economy,’ says Chancellor Rachel Reeves
Google parent company Alphabet has announced a £5bn investment into AI infrastructure and research in the UK.
The investment, to be rolled out over the next two years, will fund the expansion of Google’s newly opened £735m datacentre in Waltham Cross, Hertfordshire, and provide further backing for DeepMind, its London-based AI subsidiary headed by Nobel Prize-winning British scientist Sir Demis Hassabis.
Alphabet said the funds will also support a broad range of advanced scientific research projects.
Ruth Porat, Alphabet’s president and chief investment officer, told BBC News in an interview that the company saw “profound opportunities in the UK” due to its “pioneering work in advanced science.”
She described the move as part of a “US-UK special technology relationship,” acknowledging that while there were risks associated with AI, there was also “tremendous opportunity in economic growth, in social services, advancing science.”
The announcement came just before US President Donald Trump began his state visit to the UK on Tuesday.
Chancellor Rachel Reeves, who attended the official opening of Google’s Waltham Cross data centre on Tuesday, hailed the investment as a vital boost at a time when she is under immense pressure to reinvigorate Britain’s sluggish economy.
“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,” Reeves said.
She framed the move as proof that government reforms – cutting red tape, overhauling the planning system, and investing in technology – were reversing “decades of underinvestment that has held us back for too long.”
Reeves also hosted a high-level meeting at Downing Street on Tuesday with her US counterpart, Treasury Secretary Scott Bessent, and senior executives from BlackRock, Barclays, and Blackstone.
Alphabet’s AI push
Alphabet’s decision comes amid a surge in capital spending across the company. In July, it told investors it would increase its capital expenditure to around $85bn in the 2025 financial year, up from a previous forecast of $75bn.
The move follows a period of strong performance for the tech giant.
On Monday, Alphabet became the fourth company in history to surpass a $3tn market valuation, joining Microsoft, Apple, and Nvidia. Its shares have rallied in recent weeks after US courts declined to impose the harshest competition remedies sought by regulators, including the potential forced sale of its Chrome browser.
Alphabet CEO Sundar Pichai’s push to make Google an “AI First” company has also begun to yield results, after criticism that the firm had fallen behind rivals like OpenAI despite its pioneering research in large language models.
Porat said it was this renewed performance that had “resulted in that metric” of hitting the $3tn milestone.
Opportunities and risks
Porat also addressed concerns about the impact of AI on the workforce, particularly fears that rapid adoption could trigger a graduate jobs crisis.
“It would be naive to assume that there isn’t a downside,” she said.
However, she stressed that new industries were already emerging, with AI playing a collaborative role in areas such as healthcare.
“In jobs such as nursing and radiology, AI is collaborating with people rather than replacing them,” she said.
Her message to workers was clear.
“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.”