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Plans to set up a research centre at Cambridge in the United Kingdom to concentrate on long-term, strategic research leading to the next generation of computers are reported to be in the final stages of development by Bill Gates, founder and chairman of computer software giant Microsoft.

The centre would be owned and operated by Microsoft, but is expected to have close links to the University of Cambridge. Microsoft has had several meetings with university officials, including members of the university's council. According to some reports, one proposal is that academic staff teaching at the university should be allowed to carry out research at the Microsoft centre.

A spokesman for Microsoft says the company is “neither confirming or denying” the reports. But plans are believed to be well advanced. Alec Broers, vice-chancellor of the university, said that talks with Microsoft were “at an early stage”. A statement released by the university on Monday (2 June) said that “we would be delighted if these talks result in some type of collaboration”.

Two sites in the west of the town have been identified for the centre, and an official announcement is expected within a month. The plans follow a speech given by Gates earlier this year in which he revealed that Microsoft Research would be doubling in size within the next two years. Gates told the annual meeting of the American Association for the Advancement of Science in Seattle, Washington, that Microsoft's expansion plans were limited only by its ability to recruit talented people. The company spends $2 billion a year on research and development.

The decision to establish a major research presence in Europe — in addition to the research facility in Seattle — appears to have been flagged during a speech Gates made to the World Economic Forum in Switzerland last year, in which he raised the issue of Europe's relatively low contribution to global software research. Various sites in Europe are believed to have been investigated for the company's planned move across the Atlantic before Gates settled on Cambridge.

Contacts between Microsoft and the University of Cambridge are believed to have been facilitated by Stephen Hawking, Lucasian Professor of Mathematics, who taught cosmology to Nathan Myhrvold, Microsoft's chief technology officer.

The university has recently launched plans to set up a physical sciences and technology research site, also in the west of Cambridge. Gates is also said to be planning to make a separate donation to the university to fund a new science block.