The UK government has announced a £1.1bn ($1.47bn) plan to grow domestic AI computing capabilities, including investment in a new national supercomputer and financial support for British semiconductor firms.
The announcement was made at London Tech Week on 8 June by Technology Secretary Liz Kendall, following an earlier pledge of £400m by Prime Minister Keir Starmer for the acquisition of specialist AI chips.
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The initiative aims to ensure the UK has the infrastructure and skilled workforce required to advance AI technologies and maintain competitiveness.
The government stated that the strategy will also support the growth of British chip companies, enhance national security, and promote job creation.
Funding will be directed towards research, skills training, and early-stage support for firms developing novel chip designs.
The AI Hardware Plan includes £750m allocated for a national AI supercomputer, intended to become one of the most advanced globally when operational in 2030.
The system, described as a “heterogeneous mixed chip system”, is set to combine both established and next-generation processors.
The government indicated a preference for including British-designed chips as part of the infrastructure.
Of this funding, £400m will be used to acquire next-generation chips, with £150m specifically committed this summer to purchase inference chips, presenting an early opportunity for UK-based companies.
The strategy also features a £120m AI Hardware Innovation Programme to help domestic firms design, develop, and test new chip technologies.
At least £20m will go towards expanding the Scaling Inference Lab, jointly delivered by ARIA and CommonAI, to help companies validate technology and secure partnerships.
One project with Oriole Networks and AMD involves deploying what is described as the world’s first large-scale AI system using light for data transmission between chips.
To address skills shortages, £45m is being allocated for doctoral training, undergraduate bursaries, and programmes to build the talent pipeline, with total government support for skills in the industry now reaching £80m.
In addition, a new fund led by Silicon Valley investment firm Playground Global, with backing of up to £150m from the British Business Bank, will provide long-term capital for UK-based AI hardware companies. This investment is subject to final due diligence and legal processes. The British Business Bank described this as its largest ever fund investment.
UK Technology Secretary Liz Kendall said: “AI is the defining currency of economic and hard power in today’s world and the countries that control the hardware behind it will hold the keys to the future.
“The UK is already a global leader in chip design, and I believe this is a race Britain can win. To do that, we must back more British AI – and that means investing in the chips, computing power and skilled people behind it.
“That is exactly what this plan does, backing the British firms developing the next generation of AI hardware, so we get more jobs, more growth, and more control over the technologies our future depends on. We are backing Britain because we believe in Britain.”
Further elements of the plan include a new £12m Centre for Doctoral Training in Chip Design, expansion of the government’s semiconductor skills programme, and a strategic skills partnership with Arm.
The government also stated it will shortly launch the tender process for a £750m Next National Supercomputing Service at the University of Edinburgh to enhance the country’s research and public service capacity.
