The investment will see Microsoft expand its next generation AI datacentre infrastructure, including bringing in more than 20,000 graphics processing units (GPUs) to the UK by 2026.

Microsoft said the investment will see the company grow its AI infrastructure in London and Cardiff and potentially expand into northern England.

Datacentres process, host and store digital information that is critical for developing AI models.

To support research on AI, Microsoft will extend its Accelerating Foundation Models Research (AFMR) programme to include prioritised access to GPUs for the UK’s science and research community.

This programme includes researchers from participating universities including Cambridge, Oxford, Imperial College, University College London, Bath and Nottingham.

Microsoft will also make a multi-million-pound investment to train one million people with the skills they need to build and work with AI, including expanded training for people looking to start, or move into, a career in AI.

Working in partnership with learning and non-profit partners, the programme will focus on building AI fluency, developing AI technical skills, supporting AI business transformation and promoting safe and responsible AI development and use, including the first professional certificate on generative AI.

The news comes as the government has agreed a new Online Fraud Charter with tech companies, including Microsoft, to reduce fraud taking place on their platforms.

Under the agreement, platforms will verify new advertisers and promptly remove fraudulent content.

Individuals selling items on peer-to-peer platforms such as Facebook Marketplace will also be verified, and there will also be a function for people using online dating services to confirm who they are.

The chancellor of the exchequer announced a further £500m investment in advanced computing for AI at the Autumn Statement, bringing the government’s total planned public investment in compute to more than £1.5bn.

Microsoft UK chief executive officer Clare Barclay said: “The pace of change in AI demands action today to build a prosperous future for the UK tomorrow. Today marks the single largest investment in our more than 40-year history in the UK.

“As business and the public sector embrace the AI opportunity, we are building the infrastructure that will support the growth they need, training the people who can deliver it responsibly and securing our society against emergent threats.”

Prime minister Rishi Sunak said: “Microsoft are one of the founding fathers of modern technology and today’s announcement is a turning point for the future of AI infrastructure and development in the UK.

“The UK started the global conversation on AI earlier this month, and Microsoft’s historic investment is further evidence of the leading role we continue to play in expanding the frontiers of AI to harness it’s economic and scientific benefits.”

Chancellor of the Exchequer Jeremy Hunt said: “The UK is the tech hub of Europe with an ecosystem worth more than that of Germany and France combined – and this investment is another vote of confidence in us as a science superpower.”