The UK government will promise to buy emerging chip technology from British companies in a 100 million pound ($130 million) bid to boost growth by supporting the artificial intelligence sector. Liz Kendall, the science secretary, said the government would offer guaranteed payments to British startups producing AI hardware that can help sectors such as life sciences and financial services. Under a “first customer” promise modeled on the way the government bought COVID vaccines, Kendall’s department will commit in advance to buying AI inference chips that meet set performance standards. Kendall acknowledged that 100 million pounds “sounds small compared to the billions being spent” in the US and China but argued it was about “government showing leadership in the areas where we think we will be absolutely world-leading.” Valued at over 72 billion pounds ($94 billion), the UK’s AI market is the third largest in the world following the US and China, according to the British government. However, investment in AI in the UK lags behind the US. In 2024, US private investment in AI was at $109. 1 billion-significantly higher than the UK’s $4. 5 billion, according to the Stanford AI Index. The science secretary did not provide precise details on how the “advance payment mechanism” would work but said “cutting-edge chip companies” based in Britain will be told “the government will buy that when the technology reaches a certain standard.” “Our particular strengths as a country lie in areas like life sciences, financial services, the defense sector, and the creative sector. And where we will really lead the world is where we can use the power of AI in those sectors,” Kendall told the Financial Times. The plans came as part of a wider AI package designed to upgrade Britain’s tech infrastructure and convince entrepreneurs and investors that Labour is backing the sector ahead of next week’s Budget, which is expected to raise taxes on the wealthy. The UK has sought to attract investment from US AI companies such as OpenAI and Anthropic. The government has signed several “strategic partnerships” with American groups in a bid to attract foreign investment in UK AI infrastructure and talent, in exchange for adopting their technology in the public sector. Sue Daley, of lobby group TechUK, said the plan showed “real ambition” but warned: “Advanced market commitments of this kind must be designed carefully to avoid unintentionally distorting competition.” The government also announced that James Wise, a venture capitalist at Balderton, would chair the government’s 500 million pound sovereign AI unit, which has been set up to back AI startups alongside the British Business Bank. Additional reporting by Ivan Levingston © 2025 The Financial Times Ltd. Not to be redistributed, copied, or modified in any way.
https://arstechnica.com/information-technology/2025/11/uk-government-will-buy-tech-to-boost-ai-sector-in-130m-growth-push/