UK government outlines next wave of AI investment plans

The government has unveiled a package of investments and initiatives designed to strengthen the UK’s standing within the artificial intelligence (AI) space, which includes the launch of an investment fund to support the UK’s homegrown AI business ventures.

Among the announcements is confirmation of the location of the government’s fourth AI Growth Zone (AIGZ), sited in South Wales, with Microsoft and colocation company Vantage Data Centers involved in its creation.

The AIGZ will span several sites along the M4 corridor, from Newport to Bridgend, with the tech firms involved encouraged to work with local universities to help cultivate a pipeline of AI talent over the coming years to support the endeavour.

As confirmed by the government, this AIGZ is now in the process of seeking an investor to support the buildout of the 1GW site’s AI compute capabilities, which is expected to generate more than 5,000 jobs in the region over the course of the next decade. The AIGZ is the second in as many weeks to be announced by the government, with the first – incidentally – set to be sited in North Wales.

Jo Stevens, the secretary of state for Wales, said the creation of two AIGZs in the country will have a transformative impact on its economy. “South Wales is already the home of a growing tech industry, and this major investment in the region will help cement the UK’s place as a global leader in AI,” said Stevens.

The AIGZ initiative, announced in January 2025, has seen hundreds of local authorities and other tech market stakeholders express an interest in getting involved since the government invited them to bid for a chance to have one of these zones set up in their areas.

The intention behind the initiative is to support the buildout of the UK’s AI compute capacity by offering millions of pounds of investment and fast-tracked planning procedures for organisations that want to build an AI datacentre, as well as research capabilities, within their regions.

This is all part of a broader push by the government to position the UK as an “AI superpower”, which has also seen it announce several other investment initiatives today (Thursday 20 November) in support of its mission. They include the creation of a £500m Sovereign AI Unit – which will be chaired by venture capitalist James Wise – that will be focused on developing the UK’s homegrown AI capabilities by offering funding support to new AI ventures.

The government said the unit is intended to unite government, industry and investors to become the “go-to fund” for UK-based high potential AI startups and scaleups, and will launch next year.

Wise said: “This will be a new type of government fund – one which aims to be the first choice for founders building essential parts of the UK’s AI infrastructure and economy, one which uses the awesome power of the British state to help scale our AI breakthroughs, and one which aims to make a meaningful return for the British taxpayer.”

Additionally, the government has also vowed to make more free compute capacity available to British researchers and startups through a £250m scheme to accelerate the development of new AI models that can be used to deliver new scientific breakthroughs.

In alignment with this, the government has also vowed to provide £137m in funding to support the use of AI in drug discovery and the creation of new healthcare treatments.

Liz Kendal, the secretary of state for science, innovation and technology, said the announcements are a show of the government’s commitment and conviction that “Britain’s best days life ahead” as AI opens up new opportunities for jobs and growth.

“We’re determined to do even more to ensure we are backing British businesses, workers and researchers to benefit from the opportunities AI brings,” she said. “This is about bringing jobs, opportunities and hope to the people and places that need it most, delivering on our promise of change.”