MILAN, Oct 2 (Reuters) - Microsoft ( MSFT ) plans to

invest 4.3 billion euros ($4.8 billion) over the next two years

to strengthen its artificial intelligence (AI) and cloud

infrastructure in northern Italy, it said on Wednesday.

Microsoft ( MSFT ) said in a statement the investment would be

the U.S. company's largest in Italy to date. It will make the

cloud region ItalyNorth one of the biggest Microsoft ( MSFT ) data

centres in Europe, working as a data hub also for the

Mediterranean and north Africa.

Microsoft ( MSFT ) Chairman Brad Smith met Prime Minister Giorgia

Meloni in Rome on Wednesday, the PM's office said in a note,

adding the government welcomed an investment that would

strengthen Italy's digital role in the Mediterranean.

On Monday, Meloni met U.S. fund BlackRock Inc ( BLK )

chief Larry Fink, who travelled to Rome to discuss possible

investments in data centres and to support energy

infrastructure.

BlackRock ( BLK ) and Microsoft ( MSFT ) announced

last month

a fund worth more than $30 billion to invest in AI-focused

data centres, AI supply chains and energy sourcing, saying the

vehicle would first look at the U.S. market and then at U.S.

partner countries.

Demand for AI and cloud services is growing fast with

firms in sectors as varied as gaming and e-commerce

differentiating offerings through the integration of custom AI

models - programs that employ pattern recognition to make

decisions. ($1 = 0.9056 euros)

(Reporting by Elvira Pollina, writing by Alvise Armellini,

editing by Gavin Jones and Valentina Za)