Month: October 2026

Major package to unlock the opportunities of AI in every postcode, scale up home grown AI firms, and keep UK safe from threats announced by the Chancellor

A major package of investment to unlock the opportunities of AI in every postcode, scale up home grown AI firms, and keep the country safe from hostile threats will be announced by the Chancellor next week.

People across the country will benefit from stronger infrastructure and investment in local economies as the Chancellor is set to make AI a part of his Budget. He has announced hundreds of millions in investment to guard against the risks of AI while harnessing the opportunities to raise living standards for working people, back British industry and ensure our country is better off.

The Chancellor’s plans include £10 million per year to lead the UK’s work in understanding how AI will reshape jobs and industry, and how Britain needs to prepare for it, addressing concerns about AI’s replacement of jobs from workers across the country and making sure government is best placed to help people into jobs in future.

The investment announced yesterday helps protect against those risks, and cuts UK dependence on other countries to bolster our security and resilience while supporting home grown businesses and talent.

It will boost the UK’s ability to build our own chip design and cyber defences, and will go further to make sure AI works for Britain, boosting the economy, speeding up public services, and keeping Brits secure.

New investments in AI chip design capability in Edinburgh alongside a new AI Centre of Excellence in Manchester to develop talent will help ensure the benefits of harnessing AI are felt in every postcode through the creation of jobs and new routes to training and skills.

Chancellor of the Exchequer, John Healey MP, said: “AI will transform daily life: every firm, community, hospital, school, and every aspect of our economy can benefit.

“I understand and share the concerns of working people, so I am setting out a distinctively British approach to AI – one that doesn’t leave workers behind and defends our national interest, while ensuring the benefits of AI-enabled growth are felt right across the country.”

AI Minister Kanishka Narayan said: “Our new AI Biosecurity Lab will be a major new global institution, bringing together world-leading scientific expertise to protect people from emerging biological threats and ensure Britain leads the world in AI safety and security.

“As AI becomes more powerful, Britain must have the capabilities to protect its people and shape its own future. That means staying ahead of emerging threats, from cyber attacks to biological risks, while building more of the critical technology our security depends on.

“We cannot afford to rely entirely on technology built overseas.

“By backing British science, advanced chips and our own AI companies, we can strengthen our national security, rebuild Britain’s industrial strength and create good, skilled jobs across the country.”

Security Minister, Dan Jarvis, said: “I’m proud the UK has repeatedly been at the forefront of global efforts to use AI for the benefit of humankind.

“Today’s investment will help the UK seize the opportunities AI presents to strengthen our national security, while staying one step ahead of those who seek to use AI to do us harm.” 

AI Security

The economic opportunities from AI will only be realised if our critical infrastructure, public services and businesses are resilient to cyber, biological and emerging AI-enabled threats. This package strengthens Britain’s ability to manage those risks, gives investors and innovators confidence to build here, and will help drive adoption across businesses and public services to unlock growth all across the UK. To this end, the Chancellor has announced:

• £165m for a new National AI Biosecurity Initiative, including £100 million for a world-first AI Biosecurity Lab (AIBL) to apply AI to the detection and surveillance of biological threats, and £65 million to strengthen bio surveillance and develop medical countermeasures for priority pathogens. As a vote of confidence in the UK’s leadership on AI talent and tackling biological threats, AIBL will be supported by up to £200 million in AI model credits from OpenAI and Anthropic, plus partnerships with Google DeepMind and London-based AI life sciences pioneer Basecamp Research. 
• An additional £120 million investment in the AI Security Institute to ensure the UK remains at the forefront of understanding AI capabilities and risks through its testing and research, building a shared scientific understanding by testing new AI systems and developing technical standards to ensure risks are mitigated.
• Investing £60 million into a National Cyber Shield that will use agentic AI to improve the UK’s cyber defences, including a £25 million challenge fund to support UK AI and cyber security innovators and scoping for a new regulatory sandbox to support deployment of agentic cyber security solutions across critical national infrastructure, the public sector and industry.
• A new £70 million National Exposure and Real-Time Vulnerability (NERV) Centre will deploy AI tools to identify cyber vulnerabilities across our critical infrastructure and the economy.

Homegrown capability to put Britain in the driving seat

As well as protecting ourselves from future risks, this package backs British firms, research institutions and home grown talent to develop AI here in the UK, where we can make sure it is shaped by our values and serves the British public. This will give us greater control and make sure the UK isn’t reliant on technologies developed elsewhere.  

• An additional £60 million for the Sovereign AI Fund to enhance its ability to invest directly in promising UK AI companies, to support them to scale and succeed here. This will include expanding into a new focus area of Physical and Industrial AI, building on the UK’s leading research base and growing strengths in areas such as robotics, autonomous systems and advanced manufacturing.
• An additional £60 million will support Sovereign AI’s R&D Procurement Scheme, which will deliver innovative solutions to challenges across the health and care system and in AI security, assurance and safe adoption.
• Building up the UK’s AI hardware capabilities with £18 million to support a new UK Advanced Chip Design Academy, helping build advanced chip-design skills, connect British research more directly with advanced semiconductor manufacturing, and support the government’s drive towards reindustrialisation

Good growth in every postcode

Every part of the country must feel the benefits of the economic opportunities from AI. Support for British innovation, investment in AI to improve public services and programmes to help communities use AI to support local economies will help drive up living standards and unlock growth in every postcode.

• £15 million for an AI Challenge Prize to reward innovative AI that fixes people’s common problems with the first award targeted at firms and innovators solving health issues with AI.
• An additional £23 million over the next three years for the AI Economics Institute, the world’s first government-backed research institution dedicated to analysing the economic impacts of AI. The funding will underpin the Institute’s comprehensive research agenda on how AI is affecting productivity, growth, jobs and living standards. As part of this, the AIEI will also support the UK’s international research collaboration on these issues, including in support of the UK’s G20 Presidency next year.
• Investing in a new National Cyber Security Centre (NCSC) AI Cyber Security Centre of Excellence in Manchester to train and develop the next generation of government cyber and AI experts, so that more people can get the skills they need to do the jobs of the future.
• £30m to kickstart local AI partnerships with Mayoral Strategic Authorities, empowering local leaders to bring together councils, businesses, universities, colleges and other partners to pursue locally-led approaches to AI adoption to improve services, support local businesses, including SMEs, and provide workers with AI skills.

AI is already helping to deliver better public services across the country. For example, in the NHS it is already being used to help clinicians analyse over 210,000 chest X-rays each month, around a third of all chest X-rays in the NHS. This has led to an 11.5% increase in suspected lung cancer cases identified within 24 hours, meaning around 400 more patients receive faster clarity each month, while reducing the average wait for follow-up CT scans from 6.3 to 5.6 days.

This is alongside HMRC’s AI-powered digital assistant, Ask HMRC, which supported around 6.3 million customer interactions in 2025-26, helping them navigate services and resolve routine enquiries while freeing up around 400 full-time equivalent work hours for more complex work.

Together, this sets out a distinctively British approach to AI: managing risks responsibly, ambitious about the opportunity, and backed by the institutions, capabilities and infrastructure needed to manage the transition. It will enable Britain to shape the AI age rather than simply respond to it and ensure people across the country are better off as a result.