AI in the UK
Ahead of the UK budget Wednesday, the UK government announced a push for AI in the UK. From the press release:
"AI to power national renewal as government announces billions of additional investment and new plans to boost UK businesses, jobs and innovation"
To start with the obvious but important point: this kind of forward-thinking, optimism-oriented government policy is a welcome refreshment from continued back-and-forth on small boats, petty witch hunts and political infighting. The more time I spend in the depths of AI, the more I am convinced that the decade+ horizon is a fundamental reshaping of Western economies, with a lot of opportunity but also a shed-load of risks and consequences on which we need our governments to get a grip.
Breaking down the press release, there seems to be a few core measures:
- The government will act as a “first customer” for promising UK hardware start-ups focused on AI (i.e. chips), with a £100m fund.
- James Wise, a partner at the renowned VC Balderton Capital, will head up the Sovereign AI Unit: a £500m fund to "help build and scale AI capabilities on British shores."
- A host of big names will help advocate for AI, most notably/usefully from my perspective being Tom Blomfeld, founder of Monzo (and GoCardless) and partner at US start-up incubator Y Combinator, who will "champion British start-ups to scale up and [attract] talent and investment."
- Up to £250m of free compute to British AI start-ups, funded by government.
- ~£130m of funding to be dedicated to advancing AI in science, focused initially on drugs and treatments.
There's also some re-hashing/re-announcing of the AI Opportunities Action Plan announced in January 2025.
Overall, taken as a whole, these are great initiatives. Most importantly, they encourage British start-ups to participate in the more exciting area of the AI value chain. Other areas of the announcement that US companies like Groq and Perplexity are investing $xxm/bn into opening data centres in the UK is obviously good to some extent, but ultimately the jobs that get created are temporary construction costs, not the more durable high income, high productivity jobs that we need in future.
I also have to admit I'm very pleased to see private sector actors like James and Tom involved. I find the extent of cosiness between the US VC scene (David Sacks, a16z, etc.) and the Trump administration a bit sickening, to be honest, but I do agree with the general principle of having early-stage risk capital allocators closer to those making the decisions at the government level, particularly in areas like growth and technology.
Without falling into the Pascal's Wager dynamics of the BigTech companies in the US, my general view at the moment is that the UK government can't overdo AI investment given how fundamental it's going to be for all of us. Hopefully we can find the bravery to go 10x faster and further. Let's see how it goes.