Government commits £1bn to AI infrastructure development

Keir Starmer has announced an extra £1bn of funding to scale-up the UK’s compute power. Speaking at London Tech Week 2025 yesterday, the Prime Minister said the investment would “scale up our compute power by a factor of 20” and help the UK become “an AI maker, not just an AI taker” and provide the requisite infrastructure to ensure AI improves the country’s public services.

Although the investment will be welcomed, the fact that £1bn can scale the UK’s compute power by a factor of 20 reflects the modest baseline from which the country is working. The figure also represents a small proportion of that being invested by private companies, such as £14bn of commitments announced when the AI Opportunities Action Plan was launched at the start of the year (see PM outlines AI Opportunities Action Plan).

The investment is part of the government’s plan to “expand the capacity of the AI Research Resource (AIRR) by at least 20x by 2030”, which was detailed in the AI Opportunities Action Plan. This commitment reflects the increases in computing power the government believes will be required for future AI workloads. 

Speaking alongside Starmer at London Tech Week, NVIDIA CEO Jensen Huang said the UK was in a “Goldilock’s circumstance” with “one of the richest AI communities anywhere on the planet” and the “third-largest AI venture capital investment [area]”. He said the ecosystem is “perfect for take-off, it’s just missing one thing”, which is having its own AI infrastructure. This is something the government is also seeking to address in the Planning & Infrastructure Bill, which is intended to removing planning barriers to new datacentres (see King’s Speech introduces government plans for digital, data and cyber).

As part of the announcements, the government signed a Memorandum of Understanding (MoU) with NVIDIA to support its ambition to upskill the UK workforce in AI skills over the next 5 years. It also announced a new £187m “TechFirst” programme to help embed AI through the UK education system, the Spärck AI scholarship programme (see Government launches Spärck AI scholarships in bid to boost UK tech talent pipeline), and a new government-industry partnership to train 7.5 million UK workers in essential skills to use AI by 2030 supported by a range of companies including Google, Microsoft, IBM, SAS, Accenture, Sage, Barclays, BT, Amazon, Intuit, and Salesforce. 

The digital skills shortage remains one of the biggest challenges to AI adoption, particularly in the public sector (which was a key focus of Starmer’s speech), but the Prime Minister also raised the issue of the “social fear” of AI. Starmer acknowledged that "some people out there are sceptical" and "worry about AI taking their jobs", but argued that this debate has been revisited many times and we need to "push past it".

While the investment in infrastructure and AI skills is certainly welcome, the government cannot dismiss the legitimate concerns about AI's impact on employment—a strategy for job displacement is also needed.

Posted by: Dale Peters at 10:16

Tags: strategy   skills   investment   datacentres   AI   compute   mou