The UK government has announced ambitious plans to establish the country as a global leader in artificial intelligence (AI) through a significant expansion of its AI computing capacity over the next five years. The move comes as UK businesses increasingly prioritize investment in AI over hiring due to rising employment costs.
Prime Minister Sir Keir Starmer said, “Our plan will make Britain the world leader [in AI],” adding that it will “give the industry the foundation it needs” and lead to “more jobs and investment in the UK, more money in people’s pockets, and transformed public services.” Starmer’s excitement about AI as an engine of economic growth and public sector reform grew following a private dinner with former Google chief executive Eric Schmidt and DeepMind chief Sir Demis Hassabis in October.
The government’s plan, based on recommendations from a report by British venture capitalist Matt Clifford, includes building a new supercomputer and increasing the UK’s sovereign computing power 20-fold by 2030. The expanded capacity will be primarily used for AI applications in academia and public services. The new supercomputer will join the UK’s two other advanced machines, Isambard-AI at the University of Bristol and Dawn at the University of Cambridge.
Tech experts argue that sovereign compute capacity is essential to ensure that British AI companies and researchers can become less dependent on AI businesses in other countries. They believe that having access to reliable computer power at a reasonable cost is crucial as computing infrastructure becomes a geopolitical battleground.
Meanwhile, a survey commissioned by Boston Consulting Group and The Financial Times found that 51% of UK business leaders plan to “redirect investment from staff to AI” in response to increased employers’ national insurance contributions announced in the October Budget. Nick South, managing director and partner at BCG, noted, “People are starting to see, with AI and generative AI, the potential of those technologies to be more productive . . . in a world where the costs of employment are increasing.”
The shift towards AI investment comes as companies brace for billions of pounds in additional costs from the government’s planned workers’ rights reforms and increases in the national living wage. An executive at one of the UK’s largest employers told the Financial Times, “It’s going to accelerate job cuts across the economy, no question.”
The BCG survey also found that 57% of executives would hire fewer people in 2025 as a result of the reforms, and investing in AI was a priority for 44% of respondents this year. Digitisation is already affecting hiring, with companies like BT and Klarna announcing significant job cuts due to automation and AI.
The UK’s push to become an AI leader also includes the creation of “AI growth zones” with accelerated access to planning approvals for building AI infrastructure and an AI Energy Council to advise on energy requirements, including nuclear energy.
As the UK government and businesses double down on AI, the country aims to establish itself as a global hub for the development and adoption of this transformative technology. The coming years will reveal whether these bold investments pay off in terms of economic growth, job creation, and improved public services.
