Autumn Statement 2023: fresh support for UK AI and innovation welcomed

Delivering his autumn statement yesterday, chancellor Jeremy Hunt told MPs that he would make £500 million available over the next two years to fund new AI innovation centres. It comes on top of the government’s initial £900m commitment to AI funding announced last year.

Hunt said the money would help UK universities, scientists and small and medium-sized enterprises (SMEs) access the computational power – including UK-based quantum computing – needed to develop and take advantage of AI technology.

Sarah Cameron, advanced manufacturing and technology expert at Pinsent Masons, said: “The further £500m funding for additional innovation centres will enable improved access to advanced computer power. This is essential for next generation technologies and facilitating research and development in a range of sectors, including healthcare and engineering.”

Hunt told MPs that he would also merge the existing research and development expenditure credit (RDEC) scheme with the SME schemes, with the rate at which loss-making companies are taxed reduced from 25% to 19%. The intensity threshold in the R&D intensive scheme will also be lowered from 40% to 30% from 1 April 2024 – allowing roughly 5,000 more SMEs to qualify for the enhanced rate of relief.

“SMEs and the tech industry will be encouraged that the chancellor has increased tax relief schemes, which will boost much-needed investment, improve adoption of technology and drive up efficiency and productivity,” Cameron added.

The chancellor also announced a new set of ‘quantum missions’ as part of the government’s ongoing £2.5 billion ten-year National Quantum Strategy. These include efforts to develop accessible, UK-based quantum computers that are capable of running a trillion operations by 2035. Other strands focus on quantum networks, medical applications, navigation, and sensors for infrastructure.

James Talbot, intellectual property expert at Pinsent Masons, said: “These missions set targets for pushing quantum technology out of development and into more practical use, including within healthcare settings, by the beginning of the next decade and beyond.”

“As that happens, the increasingly crowded quantum computing patent landscape presents an opportunity for rights holders to commercialise their rights by licensing their technology – but it also opens up the threat of litigation for patent infringement,” Talbot said.

He added: “Beyond intellectual property opportunities and concerns, the power of quantum potentially poses particular concern around cyber security, the use of data – including personal data – as well as the potential to supercharge artificial intelligence.”