Microsoft still committed to £22bn UK investment despite data centre withdrawal

Microsoft’s UK boss has said the company is still committed to its 30 billion dollar (£22 billion) UK investment plan despite pulling out of a project for the UK’s largest AI data centre.

It came as the technology giant released new research showing rapid growth in the adoption of AI technology by British businesses and workers over the past year.

Last year, Microsoft said it would invest £22 billion to help fund an expansion in Britain’s AI infrastructure between 2025 and 2028.

Part of the investment plan included support for UK start-up Nscale’s proposed data centre in Loughton, Essex.

But earlier this week, Microsoft confirmed that is has pulled out a deal to lease computing capacity from site following concerns that the site will not have access to the power grid until after 2030.

Darren Hardman, chief executive of Microsoft UK and Ireland, told the Press Association that the group’s UK investment plan “will not change” despite the decision.

“When you look at the 30 billion dollar investment between 2025 and 2028, it is a small component of that,” the executive said.

“We are still fully committed to that investment package.”

Mr Hardman stressed that the firm is also still “committed” to its relationship with Nscale, with plans to work with the data centre on a number of sites outside of the UK.

The boss also told PA that he has held positive discussions with Prime Minister Andy Burnham about potential opportunities linked to AI since he was appointed to the role this summer.

Mr Hardman pointed to Manchester as a positive example of an area of the UK where AI adoption is rapidly growing and helping to support economic growth prospects.

It came as data from the technology giant showed that AI adoption has increased further across the UK over the past year.

Around 43.7% of Britons used the technology in the second quarter of 2026, compared with 36.6% a year earlier.

It means the UK was eighth in the world and second in the G7 group of countries for the pace of generative AI adoption.

However, it remained firmly below top performing countries the United Arab Emirates and Singapore, which reported AI diffusion rates of 73.3% and 64.3% respectively.