Over the next two years, the company plans to invest in AI-driven research and development units, claiming it will add more than 8,000 jobs a year across UK businesses.
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Google announced a two-year, £5 billion (€5.78bn) investment in the UK at the opening of its data centre in Waltham Cross, Hertfordshire, on Tuesday.
The news comes just ahead of a state visit by US President Donald Trump to the United Kingdom on Tuesday. The US president is widely expected to seal a tech deal with UK Prime Minister Sir Keir Starmer.
Google's investment is set to create 8,250 jobs annually across UK businesses, according to the company.
The funding will be directed towards building new research and engineering facilities, and encompasses Google DeepMind, the tech giant's AI research branch that is focusing on science and healthcare. Google is building on a "growing demand for Google's AI-powered services, including Google Cloud, Workspace, Search and Maps," the company said in a statement.
"The investments will help the UK develop its AI economy and unlock AI breakthroughs across the UK, fortify cybersecurity, and create future-focused career opportunities for millions of Brits", the statement said.
UK Chancellor Rachel Reeves, who opened Google's new data centre on Tuesday, said at the opening: "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."
Ruth Porat, president and chief investment officer of Alphabet and Google, said: "With today's announcement, Google is deepening our roots in the UK and helping support Great Britain's potential with AI to add £400bn (€462.3bn) to the economy by 2030 while also enhancing critical social services."
UK: A tech magnet?
Analysts welcome the step, although there are caveats, said Ben Barringer, global head of technology research at Quilter Cheviot.
“It is worth noting that this is a small investment in the context of Google’s $85bn (€72bn) capex spend, but nevertheless, it is a good test bed given the AI expertise in the country," he noted.
He added that Google's plans, along with a list of tech investments expected to be announced this week, show the UK is being prioritised and that the country can use its AI expertise to become a key business market.
Media reports from the Financial Times and CNBC suggested earlier that other US tech giants Nvidia and OpenAI are also considering billions of dollars worth of data centre investments in the country.
US tech companies have recently announced a list of AI-related investments in Europe. Oracle announced in July that it would invest $2bn (€1.7bn) in AI and cloud infrastructure in Germany and $1bn (€850mn) in the Netherlands over the next five years.
Microsoft said in October 2024 that it would spend €4.3bn to boost AI infrastructure and cloud capacity in Italy. Amazon said in June 2024 that it would invest a total of €17.8bn in Germany to expand its logistics network and cloud infrastructure. The company also announced a similar package to boost its services in Spain in the next decade.
