As the primary backer of ChatGPT-maker OpenAI, Microsoft is a world leader in the rapidly developing technology.

But competition for AI talent has been heating up across Europe over the past 18 months. Microsoft may seek to poach experts from other AI-focused companies to staff its new unit, such as DeepMind or OpenAI.

The move also represents a win for Britain, which has sought to bolster its credentials as a technology superpower since hosting the world's first global AI safety summit in November.

Last month, Microsoft hired DeepMind cofounder Suleyman to run its in-house Microsoft AI division.

Suleyman quit his own recently-formed company, Inflection AI, to join Microsoft, taking dozens of staff members with him.

The move received criticism from some corners, as the staff transfer meant Microsoft avoided the regulatory scrutiny that usually comes with a traditional acquisition.

While it remains unclear how many jobs the new center will create, the announcement builds on Microsoft's recent commitment to invest 2.5 billion pounds ($3.16 billion) into data center infrastructure and improving AI skills across Britain.