The Department for Science, Innovation and Technology and Technology Secretary Liz Kendall have announced a £1.1 billion AI Hardware Plan to back British chip firms, computing power and AI hardware skills.
The plan was announced on Monday 8 June at London Tech Week. It sets out government support for companies developing chips and semiconductor technologies used in AI systems.
The plan follows Liz Kendall’s earlier RUSI speech on sovereign AI capability. The measures cover supercomputing, chip procurement, innovation funding, skills and private investment support.
UK AI Hardware Plan Announced
The AI Hardware Plan sets out how the government will support British firms developing the chips and semiconductor technologies behind AI. DSIT said the plan is intended to support growth, jobs, national security and UK competitiveness.
The department said access to advanced computing infrastructure and semiconductor technologies is becoming increasingly important for economic competitiveness, research capability and national security.
- Announcement location: Liz Kendall announced the plan at London Tech Week.
- Department lead: The Department for Science, Innovation and Technology is responsible for the plan.
- Policy scope: The measures cover chips, compute infrastructure, hardware innovation and sector skills.
Funding Targets Chips And Supercomputing
The plan includes £750 million for a new national AI supercomputer. DSIT said the system will be one of the most advanced in the world when deployed in 2030.
The supercomputer will bring together proven processors, next-generation processors and advanced chips to run complex tasks more efficiently than traditional supercomputers. The government said it wants British-designed chips to form part of the system, which will join Isambard-AI and Zenith alongside DAWN in the UK’s AI Research Resource.
AI Hardware Plan Funding
| Indicator | Recent Movement | Context |
|---|---|---|
| Total plan | £1.1 billion | DSIT said the plan will back AI chips, compute capacity, innovation and skills. |
| National AI supercomputer | £750 million | The department said the funding will support a new system planned for deployment in 2030. |
| Next-generation chips | £400 million | DSIT said this part of the funding will equip the AI supercomputer with advanced chips. |
| Advance chip commitment | £150 million | The government said the commitment will support purchases of novel inference chips from innovative firms. |
Government Backs UK Chip Startups
The government said £150 million will be used this summer to purchase next-generation inference chips from innovative firms. These chips support the day-to-day operation of AI systems after models have been trained.
A further £250 million is earmarked for more specialised chips as technologies mature and move towards wider deployment. DSIT said the approach is intended to create early demand for British semiconductor technologies and help firms reach commercial markets.
- Immediate demand: The government said the summer purchase will create an opportunity for British firms.
- Later procurement: Further funding will support specialised chips as stronger technologies develop.
- Market support: DSIT said early public demand can help firms prove products and reach customers.
Innovation Programme And Investment Fund
The plan also includes £120 million for a new AI Hardware Innovation Programme to support the design, development and testing of advanced chips before commercial deployment.
At least £20 million will expand the Scaling Inference Lab, delivered by ARIA and CommonAI, which supports companies developing next-generation inference technologies.
Alongside the programme, a new UK fund led by Playground Global and backed by up to £150 million from the British Business Bank will invest in AI hardware companies. The fund remains subject to completion of due diligence and legal negotiations.
Industry And Investment Measures
| Indicator | Recent Movement | Context |
|---|---|---|
| AI Hardware Innovation Programme | £120 million | DSIT said the programme will support chip design, development and testing by British companies. |
| Scaling Inference Lab | At least £20 million | The department said the expansion will help firms prove technology and attract partners. |
| Playground Global fund | Up to £150 million | The British Business Bank will back the fund for UK-based hardware companies, subject to completion steps. |
| Semiconductor sector firms | 297 firms in 2024/25 | DSIT said a new sector study showed growth from 210 dedicated firms in 2022/23. |
Skills Measures Support AI Hardware Sector
The plan includes £45 million in new support for skills. DSIT said this will back doctoral training and undergraduate bursaries for engineers, chip designers and technicians.
The department said government funding available for industry skills needs now totals £80 million. Measures include a £12 million Centre for Doctoral Training in Chip Design and a £20 million expansion of TechFirst to support 500 more UK PhD students.
DSIT also said the existing semiconductor skills programme is funding 300 undergraduate bursaries this year. The number is due to rise to 400 from the next academic year and 500 the year after, with the total budget increasing to £48 million.
Industry And Security Context
The government said the plan is part of work to strengthen Britain’s sovereign AI capability. DSIT said the measures combine public investment, industry partnerships and support for firms working in frontier technologies prioritised by the Modern Industrial Strategy.
The demand for AI computing infrastructure is increasing globally, creating opportunities for countries with strengths in chip design, semiconductor research and advanced computing. The plan is intended to support UK participation in these areas through investment in hardware, skills and research capability.
Stakeholder Comments
Ministerial Comments
Liz Kendall, Technology Secretary said;
“AI is the defining currency of economic and hard power in today’s world and the countries that control the hardware behind it will hold the keys to the future.”
“The UK is already a global leader in chip design, and I believe this is a race Britain can win. To do that, we must back more British AI – and that means investing in the chips, computing power and skilled people behind it.”
“That is exactly what this plan does, backing the British firms developing the next generation of AI hardware, so we get more jobs, more growth, and more control over the technologies our future depends on. We are backing Britain because we believe in Britain.”
Industry Comments
Pat Gelsinger, General Partner of Playground Global said;
“The U.K. is home to some of the world’s best innovators. Building on the momentum we already have in the UK, Playground will bring our deep technical expertise, Silicon Valley presence, and our global network to help early-stage UK companies scale into the next AI powerhouses.”
James Regan, CEO of Oriole Networks said;
“This is exactly the kind of coordinated ambition the UK needs. The AI Hardware Plan brings together government, research, and industry to build the infrastructure layer that will define the next decade of AI.”
Andy McLean, CEO of the UK Semiconductor Centre said;
“We welcome the publication of the UK’s AI hardware plan and the interventions it sets out. Semiconductors are the foundation on which AI is built, and there is significant opportunity for the UK to play a leading role in the rapid development and deployment of these technologies.”
Richard Grisenthwaite, Arm Executive Vice President and Chief Architect said;
“Arm welcomes the opportunity to work with DSIT as a strategic partner for TechFirst, helping to strengthen the UK semiconductor skills pipeline and enable greater alignment and impact across education, research and workforce initiatives.”
The AI Hardware Plan sets out government funding for compute infrastructure, chip procurement, innovation support, investment and skills. DSIT said the measures are designed to help UK companies develop and scale AI hardware, while strengthening domestic capability in technologies used by researchers, start-ups, public services and industry. The plan also links semiconductor growth with national security and long-term competitiveness.
Sources: Department for Science, Innovation and Technology and The Rt Hon Liz Kendall MP.
Prepared by Ivan Alexander Golden, Founder of THX News, an independent news organisation delivering timely insights from global official sources. Combines AI-analysed research with human-edited accuracy and context.
