Alphabet to invest £5bn in UK AI projects ahead of US president's visit

Alphabet, the parent company of Google, on Monday announced a £5 billion ($6.8 billion) investment in United Kingdom artificial intelligence infrastructure and scientific research over the next two years, the company said in an exclusive BBC interview.

The investment package will include expansion of a new $1 billion (£735 million) data centre at Waltham Cross, Hertfordshire, which will be officially opened with Chancellor Rachel Reeves on Tuesday, and additional funding for London‑based DeepMind, the AI research unit led by Sir Demis Hassabis. Ruth Porat, Alphabet’s president and chief investment officer, said the move was the first of several large US investments being unveiled ahead of US President Donald Trump’s state visit.

Porat described "profound opportunities in the UK" for Alphabet’s advanced science work and said there is a growing US‑UK technology partnership. "There's downside risks that we need to work on together to mitigate, but there's also tremendous opportunity in economic growth, in social services, advancing science," she said. Porat noted that the UK government’s AI Opportunities Action Plan had helped enable the investment but said "there's still work to be done to land that" and cautioned that capturing the economic upside was "not a foregone conclusion."

Further multi‑billion‑dollar investments from other US technology companies are expected in the UK within the next 24 hours, according to people tracking the announcements. Analysts say the prospect of increased US capital and expectations of future interest rate changes have contributed to a strengthening of the pound.

Alphabet last week became the fourth company to exceed a $3 trillion market valuation, joining Nvidia, Microsoft and Meta. Porat attributed part of the firm’s recent share price surge to Google’s pivot to an "AI First" strategy under Chief Executive Sundar Pichai and court rulings that removed the immediate prospect of a company breakup. She acknowledged that until recently Google had appeared to lag some startups such as OpenAI despite pioneering much of the research behind large language models.

Environmental and energy considerations were central to questions about the new data centre. Porat said the Hertfordshire facility would be air‑cooled rather than water‑cooled and that waste heat would be "captured and redeployed to heat schools and homes." Alphabet has signed a deal with Shell to supply what it described as "95% carbon‑free energy" for its UK investments.

Porat rejected suggestions the company would sacrifice its sustainability commitments to meet AI power demands, noting the intermittency of wind and solar and the need to modernise electricity grids. "We remain committed to building our renewable energy," she said, adding that energy efficiency is being addressed across AI microchips, models and data centres.

On labour market effects, Porat said Alphabet was focusing on the potential jobs challenge as AI tools are adopted. "It would be naive to assume that there isn't a downside... If companies just use AI to find efficiencies, we're not going to see the upside to the UK economy or any economy," she said, while also arguing that AI is creating new industries and collaborating with professionals in fields such as nursing and radiology rather than simply replacing them. She urged wider adoption and familiarity with AI, saying: "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."

The Trump administration had earlier lobbied the UK to modify its Digital Services Tax, which affected large technology companies, though officials did not expect the tax to feature in this week's announcements. The investment announcement comes as governments and industry weigh the economic, regulatory and environmental implications of rapid AI deployment.