The Chancellor has announced a package of investment intended to strengthen the UK’s AI capabilities, protect against emerging threats and spread the economic benefits across the country. The measures, announced ahead of the Budget, include funding for biosecurity, cyber security, AI research, UK companies, advanced chip design and partnerships with local leaders.
The announcement presents AI as both an economic opportunity and a matter of national resilience. It also sets out a role for government in supporting domestic firms and talent, while preparing workers and public services for the technology’s effects.
Chancellor John Healey 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.”
The combination of growth, worker protections and national interest is the central test for the package. Its stated ambitions will depend on how the money reaches businesses and public services, how the programmes are coordinated, and whether the Government can show that adoption is improving outcomes.
AI Minister Kanishka Narayan said the new AI Biosecurity Lab would help address biological threats and strengthen the UK’s role in AI safety:
“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.”
The package includes £165 million for a National AI Biosecurity Initiative: £100 million for the lab and £65 million for bio-surveillance and medical countermeasures against priority pathogens. The lab is also set to receive up to £200 million in AI model credits from OpenAI and Anthropic, alongside partnerships with Google DeepMind and Basecamp Research. Those credits and partnerships add support to the programme, but are distinct from the Government’s cash investment.
The announcement frames AI as a tool that could help identify biological risks sooner and accelerate the development of responses. That potential depends on bringing technical expertise together with public health, scientific and security oversight.
Aurelia Nguyen, Deputy CEO of the Coalition for Epidemic Preparedness Innovations (CEPI), said:
“Rapid advances in AI are creating new risks related to the design and modification of pathogens, increasing the potential for both accidental and deliberate harm. But, used safely and securely, the same technology can help us detect threats earlier and design lifesaving vaccines faster, fundamentally changing what is possible in pandemic preparedness.
“The UK’s AI Biosecurity Lab complements CEPI’s goal to ensure advances in AI translate into stronger preparedness and greater protection against future biological threats.”
Her comments set out the dual-use challenge: the same advances that could help researchers respond to outbreaks may also create new risks. The lab’s contribution will therefore depend on how it develops its research, security and governance arrangements, as well as how it works with institutions already focused on pandemic preparedness.
Basecamp Research, which is among the lab’s partners, also welcomed the Government’s commitment. Its co-founder, Oliver Vince, said:
“Basecamp Research is proud to support the AI Biosecurity Lab. It’s great that the UK government is deploying cutting edge AI capabilities to strengthen our resilience.”
Professor Hugh Brady, President of Imperial College London, said biosecurity requires collaboration across institutions:
“Biosecurity is one of the defining challenges of our generation. Whether a threat arises in nature or is deliberately engineered, its likelihood and its potential impact are both increasing. Our capabilities must keep pace. AI offers extraordinary potential to detect threats earlier, respond faster, and stay ahead of risks that are evolving in real time. Imperial’s Global Biosecurity Network is already bringing together world-leading researchers, policymakers and industry to close the gap between the threats we face and our ability to respond to them. But this cannot be done by any single institution alone. The AI Biosecurity Lab is an important and very welcome initiative and we look forward to working together on the actions needed to meet this moment.”
That emphasis on joint working will matter as the lab moves from announcement to operation. Its value will be judged by the research it enables, the safeguards it establishes and the practical improvements it can deliver in preparedness.
Chair of the AI Working Group at UK Healthcare and Life Sciences Innovation (UKHLSI) – the UK’s membership organisation for healthcare and life sciences innovators – and Adviser to Sword Intelligence, Dr Mark Ratnarajah welcomed the news:
“A welcome package, with health and care clearly in scope. Backing R&D procurement for health and care, alongside a Challenge Prize aimed first at health, is a strong signal to innovators and the NHS. The next step is turning ambition into adoption: clinically governed AI, properly procured and scaled, so patients feel the benefit in every postcode.”
The package also allocates an additional £120 million to the AI Security Institute, which tests AI systems, studies their capabilities and risks, and develops technical standards. A further £60 million will support a National Cyber Shield, including a £25 million challenge fund for UK AI and cyber security innovators. The Government also plans a regulatory sandbox to support the deployment of agentic cyber security tools.
A separate £70 million National Exposure and Real-Time Vulnerability Centre will use AI to identify cyber vulnerabilities across critical infrastructure and the wider economy.
Ciaran Martin CB, former Chief Executive of the National Cyber Security Centre, said:
“This is a really welcome package at a critical time for our cyber defences. This week we’ve had a stark reminder that AI exposes some of our digital world’s weaknesses and brings new ways of exploiting them to those who’d do us harm. So we need to padlock our systems, and harness AI for defence. These measures, and the crucial reinforcement of the work of the NCSC and AISI, will help us do just that.”
The measures combine research and testing with tools aimed at improving cyber defence in practice. Their impact will depend on how the proposed centre, the AI Security Institute, the NCSC and organisations responsible for critical infrastructure work together, and how quickly useful tools can be adopted safely.
The Government is adding £60 million to the Sovereign AI Fund, which invests directly in promising UK AI companies. Its remit will expand to include physical and industrial AI, such as robotics, autonomous systems and advanced manufacturing.
A further £60 million will go to the Sovereign AI Research and Development Procurement Scheme. The scheme is intended to commission solutions to challenges in health and care, AI security, assurance and safe adoption. Alongside that, a £15 million AI Challenge Prize will initially invite firms and innovators to develop AI solutions to health problems.
The fund and procurement scheme address two different points in the development cycle: helping companies grow, and giving them routes to test and supply solutions. For the latter to work, public sector bodies will need clear problems to solve, procurement processes that allow innovation to be assessed, and the capacity to adopt solutions that meet their needs.
David Sully, Chief Executive of AI assurance company Advai, said:
“Britain has an opportunity to be at the heart of the world’s future AI safety and security ecosystem, with British companies already showing an early lead. The Chancellor’s commitment to support, grow and enable this sector will help accelerate these future global leaders.”
The package also includes £18 million for a UK Advanced Chip Design Academy in Edinburgh. It will support chip-design skills, links between British research and semiconductor manufacturing, and the Government’s wider reindustrialisation drive. Alongside investment in AI companies, the academy is intended to strengthen the technical foundations on which domestic AI development depends.
Dr Gordon Sanghera CBE FRS, Founder and Tech Innovation Advisor at Oxford Nanopore Technologies, said:
“AIBL is a bold investment in UK resilience, harnessing AI to strengthen preparedness and maintain the UK’s position as a global science and technology leader”
The Government has also committed £10 million a year to lead research into how AI may affect jobs and industry, including how the country should prepare for those changes. An additional £23 million over three years will support the AI Economics Institute, a government-backed research institution focused on AI’s effects on productivity, growth, jobs and living standards.
That work will be important to the Chancellor’s promise that workers will not be left behind. The package includes an investment in understanding the transition, but the announcement does not set out specific measures for retraining or supporting workers whose roles change. Those questions will need to be addressed alongside the economic research.
The Government points to examples of AI already being used in public services. It says AI is helping NHS clinicians analyse more than 210,000 chest X-rays a month, around a third of all NHS chest X-rays. The Government reports an 11.5% increase in suspected lung cancer cases identified within 24 hours, with around 400 more patients receiving faster clarity each month. It also says the average wait for follow-up CT scans has fallen from 6.3 to 5.6 days.
These figures illustrate the potential for AI to support clinical work, but further information on implementation, evaluation and the conditions behind those results will be needed to understand what can be replicated elsewhere.
The announcement also cites HMRC’s AI-powered digital assistant, Ask HMRC, which supported around 6.3 million customer interactions in 2025–26 and freed an estimated 400 full-time equivalent work hours for more complex enquiries.
The package includes £30 million to establish local AI partnerships with Mayoral Strategic Authorities. These partnerships are intended to bring together councils, businesses, universities, colleges and other local organisations to support AI adoption, local businesses and workforce skills.
In Manchester, the Government plans a National Cyber Security Centre AI Cyber Security Centre of Excellence to train government cyber and AI specialists. In Edinburgh, the chip design academy will build advanced semiconductor skills. The AI Challenge Prize’s first focus on health adds a further route for firms and innovators to develop solutions in a specific public service area.
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.”
Together, the regional measures reflect the Government’s aim to make AI investment visible beyond the largest technology centres. The practical test will be whether local partnerships can access the expertise and funding needed to move from collaboration to adoption, and whether the programmes create lasting opportunities for local firms and workers.
The package brings together funding for security, research, domestic companies, procurement, skills and local partnerships. Julian David’s assessment captures the breadth of that approach, while the comments from CEPI, Basecamp Research, Imperial College London and former NCSC chief Ciaran Martin show why delivery will require close coordination between government, researchers and business.
The Government says its approach will help the UK shape the development of AI and ensure people across the country benefit. Whether it succeeds will depend on the detail: how the programmes are governed, how funding is allocated, what outcomes are measured, and how public bodies and businesses can take part.
The announcements set out a significant investment ahead of the Budget. The next step is to show how each commitment will be turned into research, products, public service improvements and stronger protection against the risks AI can create.
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