![\"Work](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/06\/54065573657_df1016c8c9_o.jpg\")
\t\tThe minister also unveiled a record British Business Bank commitment\t<\/p>\n\t\t\tMonday 08 June 2026 2:00 pm
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\t\t\tMonday 08 June 2026 2:37 pm\n\t<\/p>\n
\t\tThe minister also unveiled a record British Business Bank commitment\t<\/p>\n
Keir Starmer\u2019s government has unveiled a \u00a31.1bn package aimed at turning Britain into a global AI hardware \u201cpowerhouse\u201d with ministers backing domestic chipmakers and allocating capital into training the next generation of engineers.<\/p>\n
The new AI Hardware Plan, announced at London Tech Week<\/a> by tech secretary Liz Kendall, includes \u00a3750m for a new national AI supercomputer and \u00a3400m earmarked for next-generation AI chips.<\/p>\n The minister also unveiled a record British Business Bank commitment to a specialist tech investment fund.<\/p>\n The announcements form part of ministers\u2019 efforts to push Britain further up the AI value chain, shifting focus from software and applications towards the hardware and infrastructure underpinning the AI boom.<\/p>\n \u201cAI is the defining currency of economic and hard power in today\u2019s world and the countries that control the hardware behind it will hold the keys to the future,\u201d Kendall said.<\/p>\n \u201cThe UK is already a global leader in chip design, and I believe this is a race Britain can win.\u201d<\/p>\n The package comes as governments around the world scramble to secure computing power and semiconductor supply chains, with AI increasingly viewed as both an economic and national security priority worldwide.<\/p>\n Britain\u2019s AI infrastructure push<\/p>\n At the centre of the announcement is a \u00a3750m investment in a new national AI supercomputer, which ministers say will become one of the world\u2019s most advanced computing systems when deployed by 2030.<\/p>\n The machine will combine multiple types of processors and specialist AI chips, joining existing UK facilities including Isambard-AI in Bristol and Dawn in Cambridge as part of the government\u2019s expanding AI Research Resource.<\/p>\n Of that sum, \u00a3400m will be spent on advanced chips, including \u00a3150m committed this summer to buying new inference chips \u2013 the processors responsible for running AI systems once they are trained.<\/p>\n The government hopes acting as an early customer will help create demand for British chip firms at a crucial stage of development.<\/p>\n The strategy lands amid growing recognition that access to compute has become one of the biggest bottlenecks in AI development.<\/p>\n Training and deploying frontier models requires vast processing power, while demand for specialist chips has surged globally.<\/p>\n Just four months ago, the Department for Science, Innovation and Technology (DSIT) began preparations for a separate \u00a3250m expansion of the UK\u2019s AI cloud computing capacity, part of a broader ambition to increase Britain\u2019s AI compute resources twentyfold by 2030.<\/p>\n Britain\u2019s next AI champions<\/p>\n Alongside the infrastructure spending, ministers are launching a new \u00a3120m AI hardware innovation programme designed to help British startups design, test and commercialise next-generation chips.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tBritain\u2019s first sovereign AI model secures blue-chip backing as Starmer unveils \u00a3400m plan<\/a><\/p>\n At least \u00a320m will be directed towards expanding the Scaling Inference Lab, delivered through ARIA and Common AI, which helps companies prove emerging hardware technologies and attract investment.<\/p>\n Among the beneficiaries is British startup Oriole Networks, which is developing optical networking technology that uses light rather than electrical signals to move data between chips \u2013 an area increasingly seen as critical as AI systems become more compute-intensive.<\/p>\n The government is also backing a new UK-based investment vehicle led by Silicon Valley venture capital firm Playground Global.<\/p>\n The fund will receive up to \u00a3150m from the British Business Bank \u2013 the largest single fund commitment in the institution\u2019s history \u2013 and will focus on scaling UK AI hardware companies.<\/p>\n Playground\u2019s partners include former Intel chief executive Pat Gelsinger, who said: \u201cThe UK is home to some of the world\u2019s best innovators.\u201d<\/p>\n \u201cPlayground will bring our deep technical expertise, Silicon Valley presence and global network to help early-stage UK companies scale into the next AI powerhouses.\u201d<\/p>\n The government hopes the initiative will help prevent promising British companies following the path of previous tech successes that scaled and listed overseas.<\/p>\n Skills drive targets talent gap<\/p>\n The package also includes \u00a345m of new skills funding aimed at tackling growing shortages of semiconductor engineers and AI hardware specialists.<\/p>\n A new \u00a312m Centre for Doctoral Training in Chip Design will be established, while undergraduate semiconductor bursaries will increase from 300 this year to 500 annually by 2028.<\/p>\n The government will also expand its Tech First programme, providing support for an additional 500 PhD students working in strategically important areas such as chip design and AI hardware.<\/p>\n Arm, whose processor designs underpin much of the world\u2019s computing infrastructure, has signed a new partnership with government to support semiconductor skills development.<\/p>\n The emphasis on hardware comes as investors increasingly shift attention beyond large language models towards the infrastructure needed to power them.<\/p>\n