U.S. Tech Firms to Invest More Than $8 Billion in U.K. Data Centers Amid AI Frenzy

Published: 2024-10-14 12:28:14 ET NOW

By Mauro Orru

The U.K. government said it had secured a combined investment of 6.3 billion pounds ($8.23 billion) in data centers from four American tech companies, the latest commitment from U.S. businesses to expand overseas amid booming demand for artificial intelligence.

Britain's Department for Science, Innovation and Technology said the investment pledges came from KKR & Co.-backed data-center operator CyrusOne, cloud-software company ServiceNow, Washington D.C.-headquartered data-center company CloudHQ and cloud-computing provider CoreWeave.

British officials said CyrusOne plans to spend 2.5 billion pounds on U.K. projects that should be operational by the fourth quarter of 2028, subject to planning permission. ServiceNow pledged 1.15 billion pounds over the next five years to expand its London and Newport data centers as well as office space.

Meanwhile, CloudHQ is set to develop a new 1.9 billion-pound data-center campus in Didcot, Oxfordshire for which the company already secured planning permission, the U.K. government said, while CoreWeave will invest 750 million pounds in AI cloud infrastructure.

The commitments underscore growing appetite among U.S. businesses to expand their presence and services overseas in an effort to gain an edge over rivals in the AI race. OpenAI's release of ChatGPT in late 2022 ushered in a wave of spending from companies seeking to satisfy demand for increasingly powerful data centers and cloud services. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

U.K. Technology Secretary Peter Kyle said the investment pledges came after the government designated data centres as critical infrastructure for the British economy. "Data centres power our day-to-day lives and boost innovation in growing sectors like AI," he said in a statement.

Blackstone last month committed 10 billion pounds for an AI data center in the North East of England, while Amazon Web Services, Amazon.com's cloud-computing arm, said it would invest 8 billion pounds over the next five years into its own data infrastructure.

U.S. tech giants are also expanding in continental Europe: Microsoft earlier this month pledged about $4.75 billion over the next two years in cloud and AI infrastructure in Italy.

Amazon said in June that it was planning to invest 17.8 billion euros ($19.47 billion) through 2040 to expand its logistics network and cloud infrastructure in Germany. The company also laid out plans to invest 15.7 billion euros over the next decade to expand its cloud services in Spain.

Write to Mauro Orru at [email protected]

(END) Dow Jones Newswires

10-14-24 1227ET