Microsoft, Nvidia Now Back $45bn UK Data Centre Surge

Microsoft and Nvidia have unveiled plans to invest a combined $45 billion in a UK data centre expansion, signalling a big push to bolster artificial intelligence infrastructure in the country.

The US technology giants said Tuesday they would partner with UK-based hyperscaler Nscale to develop a supercomputer facility in Loughton, a London suburb, as part of the initiative.

Microsoft will contribute $30 billion to the programme through 2028, marking the company’s largest-ever financial commitment in the UK. 

Around half of this sum will go toward capital expenditure on cloud and AI infrastructure, while the remaining $15 billion will fund AI research, model development and other projects.

“This adds to a $3.2 billion 2023 commitment to build out cloud facilities in London, Wales and potentially Northern England over a three-year period,” Microsoft Chairman and CEO Satya Nadella said in a recorded message accompanying the announcement.

Nvidia will invest $15 billion in the project, deploying 120,000 Blackwell Ultra graphics processing units in collaboration with Nscale and US-based GPU cloud provider CoreWeave. 

The chipmaker is also working with OpenAI and Nscale to launch Stargate UK, an AI infrastructure initiative modelled on a similar US programme endorsed by the White House earlier this year.

Massive infrastructure buildouts have become increasingly common as hyperscalers race to expand AI capacity. Data centre spending rose 43% year-on-year to $158 billion in the second quarter, according to Dell’Oro Group, reflecting a surge in demand for cloud and AI services. 

Microsoft alone reported $24.2 billion in capital expenditure during the quarter, largely to expand its Azure cloud footprint.

The UK has emerged as a strategic hub for cloud expansion amid rising data privacy concerns and regulatory requirements. Amazon, for instance, committed $10.4 billion last year to expand AWS capacity through 2028, following $3.9 billion of investment between 2020 and 2023. 

Oracle has announced a $6.4 billion plan to grow its UK cloud over the next five years.

Google Cloud also marked its own expansion Tuesday, opening a new facility in Waltham Cross, Hertfordshire, as part of a $6.8 billion investment in infrastructure, research, development and engineering over the next two years.

Analysts say the surge in hyperscaler investment is driven by rising enterprise demand for cloud and AI. Gartner projects that global spending on infrastructure, platform and software services will increase 21.5% to $723 billion this year, with AI-related expenditure expected to rise 50% year-on-year to nearly $1.5 trillion in 2025.

The investment wave shows little sign of slowing. Nadella confirmed Microsoft will announce additional capital expenditure for US data centres later this week, while Nvidia plans to deploy more than 300,000 Grace Blackwell GPUs across facilities in the US, UK, Portugal and Norway.

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