UK spending review: funding pledged for AI and quantum drive

Sarah Cameron and Mark Ferguson of Pinsent Masons, experts in technology law and public policy respectively, said the pledges made by UK chancellor Rachel Reeves in her spending review will have implications for organisations that both develop and deploy AI solutions; for how UK-based technology companies and universities might innovate; and for the way public sector bodies will operate in future.

Reeves’ spending review plans envisage more than £2 billion of public funds being used to implement the AI opportunities action plan that the government endorsed earlier this year. This, it said, will mean “a twentyfold expansion” of the capacity of the UK’s AI Research Resource, which was established under the previous government to provide so-called ‘super-computer’ support for AI research, as well as up to £500 million for the creation of a new UK Sovereign AI Unit to help “support the emergence of national AI champions” in tandem with the British Business Bank. The British Business Bank itself is to get almost £3bn in increased funding “to support companies to start, scale and grow in the UK”.

Another major technology-related funding commitment set out in the spending review is the up to £750 million pledged for a new supercomputer at Edinburgh University – described by the government as an asset that “will give scientists in all UK universities access to computational power that can be found in only a handful of other nations”.

In her announcement, Reeves further pledged £240m for the AI Security Institute; at least £1bn to support the scaling up of the Advanced Research and Invention Agency (ARIA), which provides R&D funding for technological and scientific breakthroughs, as part of a wider £22bn R&D funding commitment; and £1.9bn for digital infrastructure, to ensure wider access to and speedier broadband connectivity – as part of wider infrastructure investment commitments. Further funding has also been pledged to support the use of AI in government as part of a broad efficiency drive.

Sarah Cameron said: “Sovereign AI compute is important for the public sector for enabling focused research on the UK’s most critical priorities like healthcare and defence, and for supporting our academics and start-ups with affordable compute to train AI models. It should also allow access to AI compute at times of disruption.”

Mark Ferguson said the Department for Science, Innovation and Technology is arguably the biggest winner among government departments from the chancellor’s spending review, with an average annual growth of 7.4% over the next five years, which he said outstrips every other departmental rise comfortably.

"The government has spoken favourably since day one about the positive impact that AI can have on public services and the economy and, based on the overall growth in the budget of the department responsible for it and the specific projects mentioned, it is putting its money where its mouth is,” Ferguson said. “Much of the spend in the public sector will be focused on making it work more efficiently. Many of the commitments announced make good on the commitments made as part of the government’s response to the AI opportunities action plan in January, when it committed to accepting all 50 recommendations in the plan."

Digital and technologies is one of eight growth-driving sectors that the government has identified that it plans to provide special support to as part of its modern industrial strategy. More details on the implementation of that strategy are expected to be outlined later this month.