As part of the government's 2025 Spending Review, Chancellor Rachel Reeves announced a £2 billion investment to accelerate the UK's Artificial Intelligence Action Plan, positioning Britain as a global AI leader. James Clark, Partner at Spencer West and specialist in data protection, AI, and digital regulation, says this move reflects the growing international competition to dominate the AI economy.
"This puts some firepower behind the January 2025 Government AI Action Plan, which set out an ambitious vision for the UK's future as a global leader in artificial intelligence," Clark said.
He added that the government's direction represents "a sovereign, UK-first approach to AI" and signals the reality of a global race to "own key tracts of the AI economy."
The Spending Review pledges major increases in tech and infrastructure spending, including a rise in R&D funding to £22 billion annually by 2029 and a £10 billion commitment to NHS technology. The AI investment is notable not only for its scale but also for what it suggests about geopolitical priorities. With other nations racing to lead the next wave of innovation, the UK is making a strategic play to secure its share of emerging technologies.
Read James' full comments below:
"The funding announcement puts some firepower behind the January 2025 Government AI Action Plan, which set out an ambitious vision for the UK's future as a global leader in artificial intelligence.
Whilst initiatives like the landmark Global AI Summit started by the UK in 2023 show commitment to global cooperation on AI, this announcement – which is very much about a sovereign, UK-first approach to AI – shows that this country is in something of a global arms race with other nations to 'own' key tracts of the AI economy. This doesn't just mean the acknowledged world leaders (the US and China), but also 'second tier' nations that are also investing big in AI, like France.
The investment announced by Nvida this week is an endorsement of the strength of the UK's talent pool. However, key challenges for the growth of an AI economy in the UK, which I would hope this investment might begin to address, are:
- The UK has a great incubator for AI with its world class universities and research institutions. However, businesses often find it difficult to access the capital required to scale successfully. It has been announced that the British Business Bank will receive a boost in funding, which could be helpful here.
- The AI Plan recognises the importance of developing the secure, sustainable infrastructure – in the form of data centres – required to give UK AI the compute power it needs. Funding in this space could be key.
- The Plan also puts a strong emphasis on using AI to transform how government services are delivered. This is important as evidence of robust use cases in the public sector can drive awareness of AI and encourage the private sector to follow suit. Funding is needed to unlock development in this area."
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