UK government unveils £500m sovereign AI fund

• The funding will be made available to UK AI startups
• A sovereign AI unit will also offer R&D support and access to AI supercomputers

The UK government has unveiled plans for a £500m fund to support investment in sovereign AI.

In an announcement shared with the media, the UK technology secretary Liz Kendall said the funding would be used to create a new sovereign AI unit that will act as a venture capital fund within government, to invest in UK AI firms looking to make the leap from breakthrough research into large-scale commercial success.

The unit will go beyond funding, however, as it will also provide UK businesses with access to AI supercomputers, specialist research and development support, additional grants, and direct engagement with government on procurement and regulation.

UK startups raised around £6bn in venture capital in 2025 and are already more than halfway to that figure so far in 2026.

Kendall is set to officially launch the fund at an event hosted by autonomous driving firm Wayve, which she said was a strong example of a British AI success story. Wayve was founded by two engineers at the University of Cambridge in 2017, and has grown into a £6.6bn company, receiving backing from industry giants including SoftBank Group, Microsoft and Nvidia. The company also just announced $60m 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,” said Kendall in the announcement.

 “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,” she added.

Kendall will also reveal the first beneficiaries of the sovereign AI unit at the launch.

It comes as telecom operators across the globe, including BT in the UK, are looking to cash in on the opportunities offered by the provision of digital sovereign services, including AI.

– James Pearce, Editor, TelecomTV