Last week, a so-called Tech Prosperity Deal was signed between the UK government and several US tech giants as part of Donald Trump’s state visit to the UK.
Google’s parent company, Alphabet, confirmed a £5bn investment in UK artificial intelligence (AI) over the next two years. In addition, Microsoft confirmed it is investing £22bn, with Nvidia also investing up to £11bn in the UK.
The investments will be directed towards AI infrastructure and advanced scientific research. During the week, the Chancellor opened a new £735m data centre in Hertfordshire as part of Google’s investment, and Microsoft is confirmed as now being involved in the creation of a powerful new supercomputer in Essex.
Opportunities
Alphabet’s president Ruth Porat described the UK as offering “profound opportunities” in science and technology, adding that the investment reflects a “special US-UK technology relationship.”
Chancellor Rachel Reeves called the announcement “a powerful vote of confidence in the UK economy.”
The fields of healthcare, public services and business productivity are particularly seen as areas where AI can bring potential benefits.
Challenges
There is widespread concern about the effect AI will have on jobs. Talking about this, Ms Porat said: “It would be naïve to assume there isn’t a downside.” However, she continued to stress that AI will create opportunities, even new industries.
Microsoft CEO Satya Nadella acknowledged that changes in technology are affecting Microsoft, with thousands of staff being laid off this year despite record sales and profits. He said it was “the hard process of renewal.” He felt, though, that ultimately AI will bring about new products, new systems and new infrastructure.
The high energy requirements of data centres have also raised environmental concerns. However, tech companies argue that the potential benefits make it worthwhile. Google has signed a deal so that its UK investments will run on 95% carbon-free energy and the heat created by the data centres will be captured and redeployed to heat schools and homes.
Will it affect me?
For local businesses in the UK, the headline figures of these investments might feel a world away. However, the changes they signal could have impacts across the board.
There could be opportunities. For instance, the development of new AI tools could open up smarter ways of working – from managing stock to dealing with customers. There will also be challenges, including pressure on certain jobs and the cost and effort of keeping up with new technology.
The key takeaway is to stay alert – keep an eye on how AI tools are becoming available and think about whether they could help your business grow. If you’re looking for efficiency improvement in your business, get in touch.
