Amazon’s computing unit AWS is in talks with Italy to invest billions of euros in the expansion of its data center business in the country as part of the tech giant’s effort to boost its cloud offer in Europe, four people familiar with the matter said.

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LONDON — Amazon Web Services (AWS), the U.S. e-commerce giant’s cloud division, announced plans to invest £8 billion ($10.45 billion) over the next five years to build and operate data centers in the U.K. as it ramps up its cloud computing efforts in the country.

The investment, announced early Wednesday London time, comes as cloud players talk up the benefits of generative artificial intelligence (AI) and as companies look to integrate the tech into their businesses.

“We’ve seen a real uptake of cloud computing and AI technology by British businesses, and we know the U.K. has a very ambitious digital plan,” Tanuja Randery, managing director for European, Middle East and Africa at AWS, told CNBC in an interview.

“So this will go toward helping our customers to really be able to harness cloud computing, because you need the data centers to be able to actually provide cloud computing for our customers.”

Randery said generative AI is “probably the most transformative technology we have seen, possibly since the cloud and the internet” and that businesses are currently trialing the nascent tech.

“We’ve also seen that businesses are looking at this in terms of both revenue growth, employee productivity, which is really, really critical, as you know, but also being able to compete globally.”

AWS, along with other cloud players, has been investing heavily in infrastructure, such as data centers and Nvidia chips, in order to train and run AI models. These cloud players then sell AI services to businesses.

AWS competes with Microsoft and Google in the U.K. and its investment continues the company’s focus on expansion in Europe. AWS said this year it plans to invest 8.8 billion euros in existing cloud infrastructure in Germany.

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But this investment also comes at a time when regulators in the U.K. are scrutinizing competition in the cloud market with AWS and Microsoft under the microscope. The Competitions and Markets Authority is currently looking into the the U.K. cloud market.

Randery said AWS is “working very constructively” with the CMA but that authorities need to balance regulation and innovation.

“We worked very closely with governments and regulators around the world, we believe that it’s important to have regulation, but that regulation should continue to be innovation friendly,” Randery told CNBC.