£100 million competition to back British AI companies to fix public services

People in every postcode will benefit from better public services and a stronger economy as the Government today launches the first procurement competitions under its £100 million Sovereign AI R&D Procurement Scheme.

Announced by Chancellor John Healey MP at the G20 Finance Ministers and Central Bank Governors meeting in North Carolina, the launch showcases how the UK government is harnessing AI to drive good growth for all, improve public services and back the industries of the future.

The move backs innovative British AI companies to develop solutions to some of the UK's biggest challenges, from boosting NHS productivity and strengthening national security to improving cyber resilience and expanding the computing infrastructure that will power future growth.

It also helps strategically important British AI companies start here, scale here and win globally, making sure the UK captures more of the economic and technological benefits of artificial intelligence.

Chancellor John Healey MP said:

Britain is home to some of the most innovative AI companies in the world, and this government is backing them to start, scale and succeed here in the UK.

This first-of-its-kind competition will help make sure more of the benefits of AI are felt in every UK postcode.

As G20 countries seek to make the most of AI opportunities, I'm determined Britain has a lead role in harnessing this technology to drive more jobs, better public services, and growth that's UK-wide.

AI Minister Kanishka Narayan said:

When we said that Sovereign AI would put the heft of a nation behind Britain's AI founders, we meant it.

Every year the British state spends billions procuring products and solutions tackling some of the most important challenges facing society - from health, to our national defence. This first-of-its-kind scheme will open up these opportunities to the British AI innovators whose ideas could make the biggest difference, backing their businesses to grow here, and go on to win globally.

The scheme has been designed to help innovative British startups compete on a level playing field, no matter their size. Too often, smaller companies with great ideas are locked out of public contracts with national and local government because they lack the turnover, cash reserves or track record of larger firms. This scheme removes those barriers, with upfront payments available where appropriate, giving more British founders the early-stage funding they need to be able to build and prove their technology.

Successful companies will also keep the intellectual property they create, allowing them to take those innovations beyond the pilot stage and develop commercial products for customers in the UK and around the world. That means supporting better public services while helping more British AI firms grow into globally competitive businesses.

Today's announcement also builds on the Government's establishment of the AI Economics Institute, the first government-backed institute of its kind in the world. The Institute will strengthen understanding of AI's economic impacts, helping ensure policymakers have the evidence needed to maximise AI's opportunities and respond to its challenges. The Chancellor has confirmed that the UK now plans to open up AIEI to international cooperation with G7 countries, focused on information and evidence sharing where it is in our interest.

The competitions will give British AI firms the opportunity to develop solutions for public sector challenges, helping to accelerate the growth of strategically important technologies while delivering tangible benefits for citizens.

The first four competitions launched today are:

• NHS productivity challenge: Working with the Department of Health and Social Care, firms will develop AI systems that can automate workflows, coordinate care and support decision-making across health services, helping deliver the ambitions of the NHS 10 Year Health Plan while improving productivity and staff experience.
• Driving compute efficiency: Led by the Department for Business, Innovation, Science and Trade and ARIA's Scaling Inference Lab, this challenge will support technologies that improve the efficiency of AI computing infrastructure, helping deliver the Government's ambition to significantly expand the UK's public AI compute capacity while reducing costs for researchers and businesses.
• Integrate AI at pace across Defence mission environments: Working with the Ministry of Defence, firms will develop solutions that securely connect data and frontier AI capabilities across defence systems, strengthening operational effectiveness and supporting sovereign national security capabilities.
• Agent security and resilience testing: In partnership with the National Cyber Security Centre, this challenge will support technologies that help organisations understand, manage and mitigate the risks associated with increasingly capable AI agents, helping unlock the safe adoption of AI across the economy.

The competitions focus on technology that has moved beyond early research but needs the opportunity, funding and environment to prove what it can do. By becoming an early customer, the Sovereign AI will help companies cross one of the hardest stages in their growth - turning a promising prototype into technology with a proven customer and a credible route to wider adoption.

Successful firms will work with government departments to develop demonstrator-stage technologies with the potential to scale across the public sector and beyond.

The competitions are the first to be launched under the Sovereign AI R&D Procurement Scheme, with further challenges expected to follow as the programme expands.

Notes for editors:

• Sovereign AI is designed to be different from any previous government-backed unit, acting like a venture capital fund with the muscle of the state behind it - moving fast, backing ambition and cutting through the red tape that so often holds brilliant ideas back. It will invest directly in the UK's most promising AI startups, help them scale quickly, and give them the support they need to compete with the best in the world.
• The Sovereign AI R&D Procurement Scheme focuses on demonstrator-stage technologies: solutions that have moved beyond early research and development and are ready to be tested in real-world operational environments before wider deployment.
• The first competitions are intended to test the delivery model and will be followed by further challenges in future phases of the scheme.
• Applications will be assessed by the Sovereign AI team, participating government departments and independent technical experts against published competition criteria.