The UK government has launched a plan to back British AI hardware developers by guaranteeing purchases through a £100 million scheme intended to boost the country’s AI sector. Science secretary Liz Kendall argued the initiative would provide a vital customer base for early-stage chip firms and help sectors such as life sciences and financial services that rely on AI acceleration.
Under a “first customer” model inspired by the government’s COVID vaccine purchases, ministers will commit in advance to buying AI inference chips that meet defined performance standards. Officials say the advance payments will be designed to support cutting-edge British chipmakers as they scale up production.
Kendall noted that £100 million may seem modest next to the multi‑billion-dollar sums invested in the US and China, but said the plan demonstrates government leadership in areas where Britain could become world‑leading. The UK’s AI market is valued at over £72 billion, making it the third largest globally after the US and China, according to government figures.
Nevertheless, private AI investment in the UK lags far behind the United States. In 2024, private AI investment in the US reached about $109.1 billion, while the UK saw around $4.5 billion, according to the Stanford AI Index. The plan does not yet reveal precise mechanisms for the advance payments beyond promising that British companies will be told when their technology reaches a standard that triggers government purchases.
TechUK cautioned that such advance commitments must be carefully designed to avoid distorting competition, but supporters argue the policy could attract AI infrastructure investment and attract international players to adopt UK technology in the public sector. The package also aligns with broader efforts to attract AI startups and investors amid a competitive global race to lead in AI hardware and software.
