Chancellor Rachel Reeves said it is a 'vote of confidence' in the UK economy.

Google has said it will invest £5 billion in the UK in the next two years to help meet growing demand for AI services, in a major boost for the Government.

The announcement, which comes as Google opens its new data centre in Waltham Cross in Hertfordshire, is expected to contribute to the creation of thousands of jobs, the US tech giant said.

Chancellor Rachel Reeves said the major investment into research and development, capital expenditure and engineering is a "vote of confidence" in the UK economy.

It also follows reports that ChatGPT parent firm OpenAI and Nvidia will also unveil billions of dollars' worth of investment into UK data centres this week, amid President Donald Trump's state visit.

On Tuesday, Google said it will pump £5 billion into capital expenditure, research and development, and related engineering over the next two years, which will include "pioneering" AI research in science and healthcare through its Google DeepMind operation.

The Silicon Valley firm said the investment will help the UK grow its AI economy and contribute to technological breakthroughs, improvements in cybersecurity and job creation.

Google predicted the investment will help to create 8,250 jobs annually at UK businesses.

Ms Reeves will officially open the company's first UK data centre in Waltham Cross on Tuesday, amid growing demand for Google's Cloud, Workspace, Search and Maps services.

The Chancellor said: "Google's £5 billion 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.

"This Government is reversing decades of underinvestment that has held us back for too long, by slashing burdensome red tape, delivering bold reforms of the planning system and investing in better tech to unlock better jobs and opportunities."

Google DeepMind co-founder and chief executive Demis Hassabis said: "We founded DeepMind in London because we knew the UK had the potential and talent to be a global hub for pioneering AI.

"The UK has a rich history of being at the forefront of technology - from Lovelace to Babbage to Turing - so it's fitting that we're continuing that legacy by investing in the next wave of innovation and scientific discovery in the UK."

Google to invest £5bn in UK over next two years