Starmer announces sovereign compute strategy amid £1.1bn chip investment

UK prime minister Keir Starmer has revealed a sovereign compute strategy to support homegrown artificial intelligence (AI) startups as the government pumps £1.1bn into the chip industry

In a speech to open London Tech Week today, Starmer said the government wants to support “British ingenuity” and act as a partner for UK tech firms.

“I am really pleased to announce a new strategy to develop sovereign compute capability,” he said. “It includes a major new commitment to purchase specialist AI chips worth around £400m, providing a generational opportunity to some of our most promising startups.”

The £400m is part of a £1.1bn AI hardware plan announced by the government, which aims to improve the country’s deployment and scaling of AI technologies.

As part of the plan, £750m will be used on the UK’s AI supercomputer. Of that funding, £400m will be used to purchase chips – £150m for next-generation inference chips and £250m on more specialised chips as technologies mature. These chips will power the UK’s AI supercomputer.

The government is also creating a £120m AI hardware innovation programme, which aims to give UK companies funding to design, develop and test “innovative novel chips”.

There will also be funding for the Scaling Inference Lab and to upskill people in the AI hardware sector.

Commenting on the plan’s launch, technology minister Liz Kendall said: “AI is the defining currency of economic and hard power in today’s world, and the countries that control the hardware behind it will hold the keys to the future.  

“The UK is already a global leader in chip design, and I believe this is a race Britain can win. To do that, we must back more British AI – and that means investing in the chips, computing power and skilled people behind it.”

Starmer added in his speech that the government will also scale its testbed for AI compute systems by turning it into a “national capability” and supporting British startups.

The government hopes this will boost the UK tech economy and ensure British technology companies stay in the country.

In April, the government also launched a £500m sovereign AI fund to turn British AI research into companies that can stoke economic growth. The fund aims to invest directly in early and growth-stage AI companies with a typical equity investment between £1m and £10m.

The fund was trailed in November 2025 in a raft of government AI investment plans aimed at positioning the UK as an “AI superpower”. Those included the creation of the Sovereign AI Unit, chaired by venture capitalist James Wise.

In his speech, Starmer said it is the government’s job to recognise the scale of UK talent and match it with the scale of the country’s ambition.

“First, we must make sure Britain remains the home of those ideas and give our innovators the tools they need to stay at the cutting edge. That is why this government has committed record levels of funding for research and development already. But it is not just enough for ideas to be born here. They have to be able to grow here, too,” he said.

Starmer said the government has three options when it comes to AI. It can stick its head in the sand and “hope for the best”. It can remove “the guardrails completely and ignore the consequences”. Or it can take a third path, whereby it backs British businesses creating the technologies of the future.

“[The third path is] where British tech companies start here, scale here and stay here, but the rewards of their success are felt in communities right across the country, and where government is active in its approach towards tech, supporting risk-takers, making its own bets, providing the conditions for businesses to thrive, but also making sure we are sovereign,” he said.