UK unveils plans for £500m sovereign AI fund and unit to back startups, offer supercomputer access

The UK government has outlined plans for a £500 million fund to accelerate “sovereign AI,” creating a new unit inside government that will invest in domestic AI companies and help them scale from breakthrough research to commercial success. In an announcement shared with the media, Technology Secretary Liz Kendall said the sovereign AI unit will act like a venture capital fund within government.

Beyond investment, it will offer UK businesses access to AI supercomputers, specialist research and development support, additional grants, and direct engagement with government on procurement and regulation. The plan lands amid a steady flow of private capital into the sector.

UK startups raised around £6 billion in venture capital in 2025 and are already more than halfway to that figure so far in 2026, according to the announcement. Kendall is set to officially launch the fund at an event hosted by autonomous driving firm Wayve, which she cited as a British AI success story.

Founded by two engineers at the University of Cambridge in 2017, Wayve has grown into a £6.6 billion company with backing from SoftBank Group, Microsoft and Nvidia. The company also just announced $60 million of additional funding from AMD, Arm and Qualcomm.

“If we believe AI is absolutely critical to our economic prosperity and our national security, which I do, then this fund, and the even bigger ambition behind it, is one of the single most important things this government will do for the future of this country,” Kendall said.

“We believe in Britain and we are betting on Britain. We are backing our brilliant innovators and entrepreneurs, so we seize the benefits of this technology to reshape Britain for the benefit of all.” Kendall said the first beneficiaries of the sovereign AI unit will be revealed at the launch.

The announcement comes as telecom operators globally, including BT in the UK, are looking to capitalize on opportunities in digital sovereign services, including AI.