Bill McDermott, Chairman, President and CEO of ServiceNow, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 17, 2024.
Adam Galici CNBC
American software giant Service Now announced on Monday that it plans to invest £1.5 billion in the UK over the next five years, in a vote of confidence in Prime Minister Keir Starmer as he looks to attract foreign investment to the country.
The technology firm said the huge sum would boost its UK business, as it plans to expand with new office space and increase its workforce beyond the 1,000 people it currently employs in Britain.
Besides the local business expansion, ServiceNow also said it will invest in data processing for its large-scale linguistic models (LLMs), AI models that rely on large amounts of training data to understand and process text like a human.
The company said it would deliver Nvidia GPUs (graphics processing units) in its data centers based in London and the Welsh city of Newport to support data processing for its LLMs within the UK This will help support “domain-specific LLMs” for UK and government customers, said the ServiceNow.
Policymakers and regulators in Europe have been seeking the so-called “sovereignty” of AI. This refers to the idea that the technology and data supporting advanced AI systems should be kept within Europe, and accurately reflect the culture and history of Europeans.
ServiceNow said it also plans to offer new skills programs in the UK that will reach 240,000 students.
“The United Kingdom is embracing technological change at a high level. In this new era of AI, the country continues to be a global leader in driving innovation for the benefit of all its communities,” said Bill McDermott, CEO of ServiceNow, in a statement on Monday.
“Our investment accelerates the UK’s push to put AI to work, empowering people, enriching experiences, and strengthening social bonds. Together, ServiceNow and our customers across the UK are delivering a future where technology benefits everyone.”
The announcement was made as part of the International Investment Summit, where UK leader Keir Starmer will gather 300 business leaders to promote foreign investment.
ServiceNow, which has a market capitalization of $194.6 billion, has seen its shares rise more than 37% this year, thanks in large part to the hype surrounding AI.
ServiceNow’s cloud-based technology is intended to help other businesses manage digital workflows. But the company hasn’t been shy about showing off its AI prowess.
Last month, ServiceNow launched Xanadu, a platform that uses a range of AI technologies including so-called “agents” to increase employee productivity. AI agents are digital assistants designed to help workers perform tasks with limited supervision.
For the second quarter of 2024, the company reported earnings per share of $3.13, excluding items, on revenue of $2.63 billion, beating analyst expectations.
ServiceNow isn’t the only tech giant betting big on the UK as a global hub for AI innovation. At the beginning of this year, Salesforce has opened its first global AI center in London, a space it uses to facilitate AI training and development programs and foster industry collaboration.
The AI center is part of a $4 billion investment Salesforce committed to making in the UK over five years in June last year.