Dive Brief:
- Nvidia and Microsoft plan to pour billions of dollars in a multifaceted plan to build out AI infrastructure in the U.K., the two companies said Tuesday. The U.S.-based tech giants will partner with U.K.-based hyperscaler Nscale to develop a supercomputer facility in the London suburb of Loughton, according to Nvidia’s announcement.
- Microsoft will pour $30 billion into the U.K. initiative through 2028, marking its largest financial commitment in the country, the company said in a separate announcement. Roughly half of the investment will fund capital expenditures in U.K. cloud and AI infrastructure buildouts. The remaining $15 billion will support AI research, model development and other projects, Microsoft said.
- Nvidia committed 11 billion pounds ($15 billion) to the deployment of 120,000 Blackwell Ultra graphics processing units in partnership with Nscale and U.S.-based GPU cloud provider CoreWeave. The chipmaker also partnered with OpenAI and Nscale to launch Stargate U.K., an AI infrastructure push modeled on a similarly named U.S. initiative endorsed by the White House earlier this year.
Dive Insight:
Massive infrastructure buildouts fueled by tens of billions of hyperscaler dollars are the new norm in cloud as providers race to expand AI capacity.
The building boom drove up data center spending by 43% year over year to $158 billion in Q2, according to Dell’Oro Group market research published Tuesday. Microsoft alone invested $24.2 billion in capital expenditures during the quarter, mostly to grow its Azure cloud empire. The company pledged to spend $30 billion on CapEx during the first quarter of its 2026 fiscal year, which closes at the end of September.
As data privacy concerns, cloud sovereignty requirements and regulatory actions tied to generative AI deployments mount, the U.K. has become a nexus for infrastructure expansions. Last year, Amazon put 8 billion pounds ($10.4 billion) into plans to expand AWS capacity in the region through 2028, after spending 3 billion pounds ($3.9 billion) to bolster its cloud presence in the region between 2020 and 2023.
Oracle intends to invest $5 billion in its U.K. cloud over the next five years as part of a global infrastructure expansion, the company said in March.
Microsoft’s Tuesday announcement 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 release. Google Cloud opened a new facility Tuesday in Waltham Cross, Hertfordshire, a project that’s part of a 5 billion pound ($6.8 billion) investment in infrastructure, research, development and related engineering over the next two years.
The hyperscaler spending spree is tied to rising enterprise demand for cloud and AI, which is expected to increase end-user spending on infrastructure, platform and software services globally by 21.5% to $723 billion this year, according to Gartner. The analyst firm anticipates a bigger spike in AI spend, which will grow 50% year over year to nearly $1.5 trillion in 2025.
The investment wave shows no signs of abatement.
Microsoft will announce further capital expenditures for U.S. data centers later this week, Nadella said Tuesday. The company partnered with Nscale and energy company Aker to fund a five-year, $6.2 billion AI infrastructure development initiative in Norway Wednesday.
Nvidia, which saw its revenues grow nearly eightfold in three years, is working with Nscale to deploy more than 300,000 Grace Blackwell GPUs across facilities in the U.S., U.K., Portugal and Norway, the company said Tuesday.
