of british government published A.I. Hardware planning. It sets out how chip and semiconductor technology used in artificial intelligence will be supported, including £80 million for semiconductor and AI hardware skills.
The plan, announced by the Department for Science, Innovation and Technology on June 8, is built around four areas: innovation, skills, procurement and investment. This is linked to the AI Opportunities Action Plan, Modern Industrial Strategy and Digital and Technology Sector Plan.
The skills package includes expanded undergraduate scholarships, a new center for PhD training in chip design, additional TechFirst support for PhD students, employer commitment to semiconductor career paths, and a strategic industry partnership with Arm.
The government says the scheme aims to help British companies develop, demonstrate, deploy and scale AI hardware technology in the UK. This also includes public procurement commitments through a new £750m heterogeneous AI supercomputer for the AI Research Resource.
The plan identifies semiconductor workforce challenges, estimating that there will be a shortage of 10,400 workers by 2030 if the semiconductor sector grows at an annual rate of 7%. As new AI hardware companies develop and expand, they are noting the demand for chip design and verification engineers.
Skills funding for careers in AI hardware
The £80m skills package includes an expansion of the semiconductor skills program to £48m. The government says this will increase scholarships for departments such as electrical and electronic engineering and materials science.
The number of scholarships will increase from 300 in the 2025-2026 academic year to 400 in 2026-2027 and 500 in 2027-2028. The program also includes expanded school support and educational fellowships aimed at supporting chip design capacity and scale-up.
The new £12 million Chip Design PhD Training Center will support advanced research and early stage innovation. The plan also includes a targeted investment of £20 million through TechFirst, which will enable a further 500 UK PhD students to receive top-up funding and support during their PhD studies.
Skills England, the Department for Work and Pensions and the UK Semiconductor Center will work with employers to identify pathways into careers in semiconductors and AI hardware. This includes a review of the Growth and Skills Levy-funded offer, including apprenticeships, alongside other funding provisions.
The government also plans to establish a strategic industrial partnership with Arm through TechFirst. This partnership aims to connect industry needs and training in chip design and AI hardware.
Innovation and procurement initiatives
The AI Hardware Plan includes £120 million for AI hardware innovation. This includes an AI hardware innovation programme, an expanded scaling inference lab, an £18m hardware security research and development programme, a refocused semiconductor catapult and a trusted network of manufacturing and foundry partners through the UK Semiconductor Centre.
The AI Hardware Innovation Program will be designed in collaboration with UK Research and Innovation and the UK Semiconductor Centre. We support UK-based companies through prototyping, collaborative research and development, early stage grants and mission-driven programmes.
The Scaling Inference Lab will receive at least £20m of additional funding, building on the Advanced Research and Inventions Agency’s existing £50m investment. This lab supports testing and validation of new AI computing systems with real-world workloads.
A £750m heterogeneous AI supercomputer for AI Research Resource includes major procurement commitments. The government says the system will enable the integration of a variety of advanced computing technologies, including new AI architectures and, over time, quantum computing, into a single system for research workloads.
The plan includes a £400m procurement opportunity for specialist chips. This includes an up-front market commitment of £150m for new high-performance inference chips, up from the previously announced £100m, and a further £250m procurement for additional specialist hardware.
Investment route for AI hardware companies
The plan includes a deeptech hardware venture fund led by Playground Global with up to £150m of support from the British Business Bank. Playground Global will also establish its first office outside the US in the UK.
With computing a priority, the government says the £500m Sovereign AI Fund will also support AI hardware companies. The fund will work with the Office for Advanced Research and Inventions and the Scaling Inference Institute to validate the technology and build a pipeline to the UK’s AI infrastructure, including AI research resources.
UK Export Finance supports AI hardware companies looking to scale internationally, including through Export Development Guarantees and General Export Facilities. The Export Control Joint Unit will also work with chip designers and start-ups on export licensing requirements, where licensing is required.
The plan names several UK AI hardware and research companies including Fractile, Lumai, Oriole Networks, Salience Labs and Callosum. The company also cited Arm, a British chip design company headquartered in Cambridge whose technology is used across connected devices, cloud computing, AI infrastructure and automotive platforms.
The AI hardware plan will now move into delivery through four pillars, with procurement planned for summer with £150m of pre-market commitment. The skills commitment includes increased scholarships over the next two academic years, TechFirst support for an additional 500 PhD students, and employer initiatives around AI hardware career paths.
