ServiceNow to invest $1.5 billion in the UK to localize AI data processing
American enterprise software giant ServiceNow says it plans to invest $1.5 billion in the U.K. over the next five years.
American enterprise software giant ServiceNow announced Monday it plans to invest $1.5 billion in the U.K. over the next five years, in a vote of confidence for Prime Minister Keir Starmer as he looks to attract foreign investment to the country.
In a significant move that underscores the United Kingdom's growing importance in the global tech landscape, ServiceNow, a leading cloud-based workflow management company, has announced a substantial £5.3 billion ($6.5 billion) investment in the country. This mammoth financial commitment is set to fuel the expansion of ServiceNow's UK operations and contribute to the nation's artificial intelligence (AI) capabilities.
The investment will primarily focus on three key areas: business expansion, AI development, and skills training. ServiceNow plans to increase its physical presence in the UK by acquiring new office space and growing its workforce beyond the current 1,000 employees. This expansion is expected to create numerous job opportunities and strengthen the company's foothold in the British market.
A significant portion of the investment will be directed towards enhancing the UK's AI infrastructure. ServiceNow intends to localize the processing of data for its large language models (LLMs) within the country. To achieve this, the company will deploy NVIDIA graphics processing units (GPUs) in its data centers located in London and Newport, Wales.
This move will enable the development of "domain-specific LLMs" tailored for UK clients and government entities, aligning with the growing call for AI "sovereignty" among European policymakers and regulators.
The concept of AI sovereignty emphasizes the importance of storing AI technologies and data within Europe, ensuring that these systems accurately reflect European culture and history. By investing in local data processing capabilities, ServiceNow is positioning itself at the forefront of this movement, potentially setting a precedent for other tech giants operating in the region.
In addition to infrastructure and business expansion, ServiceNow is committed to addressing the skills gap in the UK's tech sector. The company plans to introduce new skills programs that aim to reach 240,000 learners, contributing to the development of a highly skilled workforce capable of driving innovation in AI and related technologies.
Bill McDermott, ServiceNow's CEO, expressed enthusiasm about the investment, stating, "The United Kingdom is embracing technology transformation at scale. In this new age of AI, the country continues to be a global leader in driving innovation for the benefit of aLL its communities." He emphasized the company's goal of putting AI to work in a way that empowers people, enriches experiences, and strengthens societal bonds.
The timing of this announcement coincides with the International Investment Summit, where UK leader Keir Starmer is set to meet with 300 business leaders to encourage foreign investment. ServiceNow's commitment serves as a powerful endorsement of the UK's potential as a global hub for AI innovation and tech development.
ServiceNow's investment in the UK follows a trend of major tech companies recognizing the country's strategic importance. Earlier this year, Salesforce opened its first global AI center in London, part of a $4 billion investment plan announced in June of the previous year.
The tech firm's confidence in the UK market is reflected in its strong financial performance, with shares climbing over 37% this year, partly driven by the excitement surrounding AI. In the second quarter of 2024, ServiceNow reported earnings per share of $3.13 (excluding items) on $2.63 billion in revenue, exceeding analyst expectations.
As ServiceNow continues to innovate in the AI space, exemplified by the recent launch of its Xanadu platform featuring AI "agents" designed to boost worker productivity, this substantial investment in the UK positions the company to play a pivotal role in shaping the future of AI technology and its applications in Europe and beyond.
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