Government to invest over £2 billion in the UK's AI ecosystem

Artificial intelligence and related computing tech did well in the much-heralded spending review. The government is allocating some £2 billion over the next four years, much of it aimed at implementing the 50 recommendations of January’s AI Opportunities Action Plan. (See this Insight for an overview of the plan.)

Compute capacity

Around £1 billion is to be allocated to building Britain’s sovereign compute capacity. The computing resources will be available for use by researchers and startups as part of the AI Research Resource programme, expanding compute capacity a minimum of twenty-fold by 2030. More details should be forthcoming after the review of the UK's compute resource which is due in summer 2025.

The new Sovereign AI Unit is to receive up to £500 million. It will work together with the British Business Bank to create AI Growth Zones, which were a key recommendation of the AI action plan.

There will also be £750 million for a supercomputer at the University of Edinburgh (a project which the government put on hold shortly after coming to power), a resource which will be available to a range of scientists in different fields across the UK.

Skilling up

The Sovereign AI Unit money will also fund:

• A £25 million scheme to bring elite AI experts to the UK. Turing AI "Global" Fellowship recipients will receive substantial packages to relocate to the UK and build a team of experts to conduct frontier AI research and contribute to the UK’s AI ecosystem.
• A £5 million expansion of the "Encode: AI for Science Fellowship" programme (a collaboration between Pillar Venture Capital and the Advanced Research and Invention Agency) which enables world-class AI researchers to spend a year in a cutting-edge scientific lab.

Nor is the pipeline being neglected, with the launch of a £187 million “TechFirst” programme to bring digital skills and AI learning to schools and communities, aiming to train people for future tech careers. There are four strands:

• "TechYouth", billed as the flagship strand of the programme, will give one million students over three years the opportunity to learn about technology and access to new skills training and careers.
• "TechGrad" will give undergraduate scholarships to 1,000 high-flying domestic students each year within areas like AI, cyber security, and computer science, as well as helping fund research MSc places in key tech sectors, and elite AI scholarships.
• “TechExpert” to expand provision of AI courses in universities and support AI scholarships, giving up to £10,000 in additional funding to 500 domestic PhD students conducting research in tech, with the aim of accelerating cutting-edge innovation.
• "TechLocal" as seed funding to help regional innovators and small businesses develop new tech products and adopt AI.

The Department of Science, Innovation and Technology (DSIT) has also announced a partnership with several leading technology companies to deliver AI skills training to 7.5 million workers. It is unclear whether the "partnership" has yet advanced beyond a "first round of focused talks".

Safety first

Another winner is the AI Security Institute which will be given £240 million as it separates from the government to become an arm's length body.

The institute (formerly the AI Safety Institute) works with third-party AI developers to conduct safety testing of their AI systems. If and when the government decides to bring forward AI-specific legislation, there is every chance that the institute would play a key role.

On the horizon

The government is due to publish its Industrial Strategy this month (June 2025). This will have more on AI and compute, but more widely it will set out plans to "drive growth" by focusing on the sectors that the government has already identified as having the highest growth potential, including the creative industries sector and the digital/technology sector. The idea is that the government will deliver more jobs, new opportunities and higher living standards by focusing on these "growth" sectors and working in partnership with businesses. According to the government, priorities from the industrial strategy are "hardwired" into the recent spending review.

For example, DSIT's spending will also include £1.9 billion for Building Digital UK, which oversees the transformation of the UK's digital infrastructure. This will include the provision of gigabit-capable broadband to reach 99% of UK premises by 2032 and delivering the Shared Rural Network so that the most remote areas in the country have 4G coverage.

There will also be funds for the creative industries, the government has promised a "significant increase" in funding to support regional growth, develop creative places and ensure the UK's creative industries "remain world-leading".

The AI Action Plan emphasised the importance of regulatory certainty for AI, including around copyright law and its application to use of content for training AI systems. Following the sometimes frenzied debate that raged during the passage of the Data (Use and Access) Bill, on the question of use of creative content without the IP rights holder's permission, very little on AI and copyright made it into the final draft. The position remains uncertain as to when (or whether) there will be any changes to this aspect of the law.