UK government will buy tech to boost AI sector in $130M growth push

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.”