UK adjusts AI strategy to navigate budget constraints

The new UK Government is developing an AI strategy that prioritises public sector adoption over direct industry investment, as part of broader cost-cutting measures ahead of the autumn budget.

Since taking office, the government has been reviewing AI-related expenditures and has already cancelled £1.3 billion worth of investments in related technologies proposed by the previous administration—including an £800 million investment for a supercomputer at the University of Edinburgh.

While £1.3 billion represents a relatively small amount in the broader AI landscape, the decision has faced criticism from some industry leaders, who interpret it as a sign of diminishing interest in supporting innovation. In contrast, the French government has recently dedicated €2.5 billion (£2.1 billion) to developing AI technology domestically.

Additionally, there are unconfirmed reports suggesting that the French government abandoned plans to establish its AI Safety Institute in its San Francisco office. This office was expected to open this summer, with potential employees earning over $100,000 (£76,245).

According to a source familiar with the Department for Science, Innovation, and Technology (DSIT), this shift in focus may be part of an effort to distinguish the new government’s policy from that of its predecessor.

Tech minister Peter Kyle has also dismissed one of the co-founders of the AI Safety Institute, Nitarshan Rajkumar, from his position as a senior policy advisor. While new governments often rely on their own advisors, this development has raised questions among some industry experts.

The government is enlisting the help of Matt Clifford, a tech entrepreneur who organised last year’s AI Safety Summit, to draft a new strategy. The plan is due to be presented in September, ahead of the government’s autumn budget.

A government spokesperson stated that it continues to see AI’s transformative potential and that it remains committed to finding ways to ensure that the technology can be harnessed to boost growth and create opportunities across the UK.

According to tech minister Kyle, the government will focus on promoting the increased adoption of this processing method in the public sector to reduce costs. This will come at the expense of scaling back its direct investments in industry.

Last November, Britain hosted the world’s first AI Safety Summit, which attracted global leaders and tech industry figures. The event was a wake-up call to balance the approach to AI’s risks and benefits. The DSIT has started hiring economists to model the impact of AI applications across the UK.

At a meeting held in Downing Street, Clifford met with a number of major venture capitalists and tech companies to discuss the government’s AI strategy. The conversation was dominated by how AI can help improve public services, how it could be used to support university spin-out companies, and how it can facilitate start-ups hiring from overseas.

The government maintains that difficult decisions are necessary to address a £22 billion deficit in public finances left by the previous administration.

While tech minister Kyle has spoken of a “bold approach” to AI, some industry participants express concerns about a potential scaling back of ambitions in this area.

(Photo by Chris Boland)

See also: UK backs smaller AI projects while scrapping major investments

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

Tags: ai, government, uk