Government to invest £500 million in British AI with launch of new unit

The Technology Secretary has announced a £500 million investment in UK AI, to take the form of the creation of a Sovereign AI Unit.

The body will act as a venture capital fund within government, making targeted investments into UK AI firms, as well as providing direct access to the UK’s fastest AI supercomputers, specialist research and development support and grants, and direct engagement with government on acquisition opportunities.

The creation of the unit seeks to eliminate what the government calls the ‘structural barriers’ that slow the growth of UK AI businesses, by providing them with resources and support.

Technology Secretary Liz Kendall emphasised the government’s view of the importance of AI for the country’s prosperity and security, as she announced the first companies receiving backing from Sovereign AI.

She said: “[T]his fund, and the even bigger ambition behind it, is one of the single most important things this government will do for the future of this country.

“We believe in Britain and we are betting on Britain.

“We are backing our brilliant innovators and entrepreneurs so we seize the benefits of this technology to reshape Britain for the benefit of all.”

Sovereign AI represents a change in the government’s approach to AI, marking a shift from a fairly fragmented approach to more consistent and focused backing of firms operating in areas deemed strategically important, such as those relating to economic growth, public services and national resilience.

This forms part of a strategy to make the UK more competitive in the sphere of AI on an international scale. The government stated that “as global competition in AI intensifies, countries that succeed will be those able not just to invent new technologies, but to build and retain companies capable of deploying them at scale”.

The AI sector is becoming increasingly prominent, with AI startups having raised £6 billion in venture capital over the course of the past year, and appearing on course to far surpass that figure in 2026.

The Unit's launch was hosted by Wayve, a British autonomous driving software company, who are being highlighted as an example of a UK AI success story.