- The UK government will spend £100 million to purchase AI chip technology from domestic startups, following a “first customer” model similar to the COVID vaccine procurement: the State commits to paying upfront for inference chips that meet performance standards.
- Science Secretary Liz Kendall admits that £100 million is “small compared to the billions of USD” of the US and China, but emphasizes the goal is to demonstrate national leadership in areas where the UK has strengths, such as life sciences, financial services, defense, and innovation.
- The UK AI market is valued at over £72 billion, ranking third globally after the US and China; however, private investment in the US in 2024 reached $109.1 billion, while the UK only reached $4.5 billion.
- The details of the “advance payment” mechanism have not been officially announced, but the government will inform chip companies in advance that they “will buy technology that meets the standard,” aiming to create a strong market signal to attract investment and talent.
- This package is part of a program to upgrade technology infrastructure and sends a signal that the Labour government supports AI before announcing a new budget that may include increased taxes on the wealthy.
- The UK continues to attract US firms like OpenAI and Anthropic through a series of “strategic partnerships,” in exchange for applying their technology in the public sector.
- TechUK warns that market commitments like this must be carefully designed to avoid distorting competition.
- Simultaneously, the government appointed James Wise (Balderton) as the chairman of the £500 million sovereign AI unit, collaborating with the British Business Bank to support UK AI startups.
📌 Summary: The UK government will spend £100 million to purchase AI chip technology from domestic startups, following a “first customer” model similar to the COVID vaccine procurement: the State commits to paying upfront for inference chips that meet performance standards. This package is part of a program to upgrade technology infrastructure and sends a signal that the Labour government supports AI before announcing a new budget that may include increased taxes on the wealthy. The government will buy technology that meets the standard to create a strong market signal to attract investment and talent.
