Google Commits £5 Billion to UK Tech Expansion, Fueling European Infrastructure "Arms Race" Among US Tech Giants

TradingKey - On September 16, U.S. tech giant Google (GOOG.US) announced it will invest £5 billion (approximately $6.78 billion) in the United Kingdom over the next two years, demonstrating the company's strategic expansion of artificial intelligence (AI) infrastructure and related services across Europe.

The company stated that this investment covers artificial intelligence, energy capacity, workforce training, as well as research and development and related engineering fields, expected to create more than 8,250 jobs annually for businesses across the UK.

Google's £5 billion investment plan includes capital expenditures, R&D spending, and related engineering costs over the next two years, with special emphasis on supporting its London-based AI division — Google DeepMind — particularly in frontier AI research in science and healthcare.

Rt Hon Rachel Reeves MP, Chancellor of the Exchequer said: "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.

"With today's announcement, Google is deepening our roots in the UK and helping support Great Britain's potential with AI to add £400 billion to the economy by 2030 while also enhancing critical social services. said Ruth Porat, President and Chief Investment Officer, Alphabet and Google.

However, the large-scale expansion of data centers has raised concerns about the strain on national grid capacity. The rapid development of artificial intelligence demands extremely high computing power, which comes with massive energy consumption.

In response, Google stated it will partner with Shell to store and deploy clean energy, helping its UK operations achieve or approach 95% carbon-free electricity by 2026. New data centers will adopt advanced air cooling systems to minimize water usage, while excess heat generated by data centers will be used to provide free energy for local households, schools, and businesses.

Google's investment comes amid a wave of large-scale infrastructure expansion by U.S. tech giants across Europe.

Oracle announced in July this year that it will invest $3 billion over the next five years to expand its AI and cloud infrastructure in Germany and the Netherlands. Microsoft announced last October plans to invest approximately $4.75 billion over the next two years to build cloud and AI infrastructure in Italy.

E-commerce and cloud services giant Amazon similarly stated last June that it plans to invest €17.8 billion (approximately $20.89 billion) by 2040 to expand its logistics network and cloud infrastructure in Germany, with plans to invest €15.7 billion over the next decade to expand cloud services in Spain.

Notably, U.S. President Donald Trump arrived in the UK today to begin his second state visit during his term. Accompanying him is a high-profile delegation of technology and financial enterprise executives, with the core agenda focused on signing substantial economic cooperation agreements, particularly in the areas of artificial intelligence, civilian nuclear energy, and reducing trade tariffs.

Google shares rose 4.3% at Monday's close at $251.76, with the stock having gained over 50% in the past six months. According to TradingKey Stock Score, Google currently scores 6.89, ranking 54th among 470 software and IT service stocks, placing it in the upper-middle range of the industry.