In his Autumn Statement, Chancellor Jeremy Hunt announced plans aimed at strengthening the country’s position in artificial intelligence.
Digital technologies, ranging from smartphones and apps to the Internet of Things, have revolutionised daily life. The UK is capitalising on the vast growth opportunities these technologies present, maintaining its status as Europe’s top tech ecosystem.
Last year, the UK’s tech sector was valued at more than double that of Germany and three times that of France, contributing a Gross Value Added (GVA) of £158 billion. This sector is not just about the three million jobs and 85,000 tech startups it encompasses, including companies like DeepMind. The UK is also at the vanguard of developing future technologies such as artificial intelligence (AI) and quantum computing. This commitment positions the UK as a leader in driving technology’s role in positively transforming lives.
Over the past year, the field of AI has seen rapid progress, particularly with the introduction of new generative AI chatbots like ChatGPT and Bard. The economic implications of AI are expected to be substantial. A Goldman Sachs report recently predicted that generative AI could enhance global labour productivity by over 1% annually in the decade after its widespread adoption. Positioned as the third highest globally in AI investment, the UK is primed to capitalise on these benefits. The AI industry already makes a significant contribution to the UK economy, adding £3.7 billion and providing employment to 50,000 people nationwide.
To harness the vast potential benefits of AI, the UK is emphasising collaboration with international partners to ensure the responsible development of advanced AI systems. Demonstrating its leadership in this field, the UK recently hosted the world’s first AI Safety Summit. Building on this, the government is set to establish the inaugural AI Safety Institute, with a starting investment of £100 million. Concurrently, the government is refining its broader regulatory framework to strike a balance between fostering innovation and ensuring safety. It plans to publish its response to the AI whitepaper by the year’s end and introduce a pilot AI Regulatory Sandbox in the spring. Furthermore, later this year, the government will launch the Manchester Prize, offering awards of up to £1 million over the next decade to researchers focusing on the safe and responsible use of AI.
A critical component of establishing a leading AI ecosystem in the UK is the availability of computational resources, essential for AI model development. In the past year, the government has made substantial investments in this area, including a £900 million allocation announced during the Spring Budget 2023. An additional investment of £500 million in computing resources for AI is planned for the next two fiscal years, bringing the total planned investment to over £1.5 billion. These investments are poised to empower researchers and small and medium-sized enterprises (SMEs) to develop new foundational models and maximise the UK’s AI capabilities, potentially leading to breakthroughs like new drug discoveries. This initiative aligns with the government’s £100 million AI Life Sciences Accelerator Mission, introduced by the Prime Minister, which aims to leverage health data and advanced AI to tackle major national health challenges.
These combined investments are poised to propel the UK forward in realising the full potential of AI. They will facilitate everything from the development and testing of sophisticated AI models to fostering an environment conducive to further innovation. Additionally, they will ensure the safe application of AI across various sectors of the economy.
Claire Trachet, CEO and Founder of business advisory, Trachet, said: “Today’s Autumn Statement provided welcome news for what has been a turbulent economic period for the UK’s investment ecosystem. The government are doubling down on their backing for business growth in the UK, with the extension of the tax break as well as introducing measures to boost foreign investment, relief is on the horizon for companies that have been facing major economic challenges.
“The chancellor’s announcement comes hot on the heels of the lowest levels of inflation since June of last year and a second consecutive interest rate hold, showing strong signs of the UK economy rebounding, which can only spell positive news for businesses across the country.
“The government’s continued commitment to strengthening the country’s position in artificial intelligence through a further £500m in funding for UK AI will enable tech firms to bring cutting-edge products to market faster and ensure that Britain doesn’t lose its spot as a leader in Europe for this sector. Following on from the success of supercomputing centres in Edinburgh and Bristol, the government are doubling down on their ambition to make the UK an AI powerhouse.”
