UK Puts AI at Center of Its Economic Growth Strategy

The U.K. government last week announced a wide package of AI investments designed to place artificial intelligence at the center of its economic renewal strategy, committing billions of pounds for regional growth, research access and homegrown chip development. The plan, released by the Department for Science, Innovation and Technology, frames AI as a long-term engine for job creation and industrial capacity.

The announcement establishes an advance market commitment of up to 100 million pounds, which allows the government to act as the first buyer for U.K. firms developing inference chips. Officials said the commitment helps domestic hardware start-ups reach commercial readiness in a market dominated by large international suppliers. The approach reflects a shift in government policy and signals a willingness to intervene earlier in the technology supply chain.

The pivot stands in contrast to the government’s previous direction. PYMNTS reported in 2024 that parts of the U.K.’s earlier AI strategy had “faced serious scaling back” after several initiatives were narrowed or delayed. The new package moves toward a more concentrated model that channels funding into hardware, compute access and regional development hubs.

One of those hubs is the newly announced AI Growth Zone in South Wales, which the government says will create more than 5,000 jobs tied to data centers, model development and supporting infrastructure. The development zone encompasses land that previously housed the Ford Bridgend Engine Plant. Additional zones will be announced over the coming months.

The investment package also includes up to 250 million pounds to provide free compute access for British researchers and startups. A separate AI for Science strategy backed by 137 million pounds will support research in fields such as drug discovery and materials science. Ministers said expanded access to high-performance computing is essential for keeping the U.K. competitive in scientific areas that depend heavily on machine intelligence.

In remarks published alongside the announcement, U.K. Secretary of State for Science, Innovation and Technology Liz Kendall said the government aims to direct AI investment toward communities that have historically experienced limited growth, with more details to be released later in the year.