Investment in infrastructure. Access to public and private data sets. A commitment to harnessing the power of artificial intelligence to make Britain’s public services more efficient. Those were just some of the ingredients announced yesterday under the U.K. government’s AI Opportunities Action Plan. So, what impact will this have on startups in the sector?
It was undoubtedly a big day, with Science and Technology Minister, Peter Kyle and Prime Minister Keir Starmer both on hand to promote the initiative and stress the importance of AI as a driver of growth and productivity. Their central theme was the need to nurture a home-grown industry, with companies that can compete with their counterparts in the U.S. and China.
No one would argue with the ambition. As Keir Starmer pointed out, in the not-too-distant future, businesses and public sector bodies in just about every country in the world will be using AI tools to transform the delivery of services. The question is, whether those countries will become importers of the technology or makers and exporters. Britain’s ambition, he said, was to become an exporter.
It’s important, therefore, that Britain supports its AI startups. So, will this program achieve that aim? In the wake of the announcement, I asked a number of technology companies and interested parties to comment on the program and whether the measures announced will make it easier to bring AI tools to the market.
So, what’s in the package? The most eye-catching element was a promise that U.K. public bodies such as the NHS would increasingly use AI to handle administrative tasks, freeing up workers to become more productive. The government also plans to improve the infrastructure by setting up special AI Growth Zones in which new data centers and power supplies can be built quickly, helped by streamlined planning laws. More controversially perhaps, there are plans to make more public data available to AI firms.
And there has been a broad welcome from startups.
Investment In Infrastructure
AI Kazmi is co-founder of AI Simulator, an AI platform that simulates investment markets. As he sees it, the plan is helpful.
“The AI Action Plan addresses the needs of startups in several ways,” he says. “The key ones to me are the investment into AI infrastructure, the focus on making the public sector more accessible and the encouragement of public-private partnerships.”
Kazmi also welcomes investment into infrastructure, including a new supercomputer and AI Growth Zones. “This will give startups the powerful computing resources they need to develop their products,” he says.
Perhaps not surprisingly, Spencer Lamb, CCO of infrastructure solutions company Kao Data is also enthusiastic about plans to build out the bones of Britain’s computing capability. “Securing domestic computing capacity is essential to ensure the UK meets its ambitions to become an ‘AI maker rather than an AI taker’, and to attract continued investment from the world’s leading startups and scaleups to our shores,” he says.
“Kao Data is encouraged by the report’s proposal to establish AI Growth Zones (AIGZs) to accelerate the development of AI data centres. “Securing domestic computing capacity is essential to ensure the UK meets its ambitions to become an ‘AI maker rather than an AI taker’,” and to attract continued investment from the world’s leading startups and scaleups to our shores,” says Lamb.
Public Data
Making public sector data available to AI innovators is also seen as an opportunity, although one that must be handled carefully.
Dr. Hector Zenil is founder and Chief Visionary Officer of Oxford Immune Algorithmics. He welcomes the plan for a national data library, while also also stressing the need to store information securely. He points to the importance of data access in his company’s field of precision healthcare.
“There have been concerns about access to patient data, but if the UK is to lead in AI for healthcare it is critical that technologies can create a complete picture of a patient’s medical history, environment and the condition being treated. For example, using AI to identify a possible cancer in an X-ray will speed up diagnosis, but consultants only reach conclusions about diagnosis having understood a patient’s unique circumstances,” he says.
However, as is always the case, the devil will be in the details of the plan. Muj Choudhury is CEO and co-founder of RocketPhone, an automated CRM service. He says the government’s blueprint could be just what Britain needs but expresses some concern about the geographical rollout.
“Yet critical gaps remain in how these resources will be democratically distributed across Britain’s tech ecosystem. While infrastructure prioritisation is welcome, the focus on supercomputers primarily benefits research institutions rather than commercial innovation,” he says.
He also wonders whether the investment in AI will largely benefit established players, rather than encouraging innovation.
Another potential stumbling block is energy. Luke Alvarez, a Managing General Partner at VC Hiro Capital points out that AI tools are hungry for power and this may bump uncomfortably against the net zero aspirations of the U.K..
“We need a lot more energy fast. The UK’s current Net Zero strategy and the bias towards wind is incompatible with this. A low cost of energy is almost the key determinant of national success, but we have one of the highest in the world. We need a lot more nuclear and SMRs, we probably need a lot more gas in the short term, preferably sourced from the UK,” he says.
Other potential stumbling blocks include a shortage of investment and perhaps also an unwillingness by the government to contemplate cuts to public sector payroll caused by AI.
There is also the talent gap to consider. “Simplifying visa rules and running flagship scholarship programmes to attract global AI experts might fill immediate talent gaps to deliver initial plans but cultivating an innovative economy requires a more holistic approach to talent,” says Aline Miller, a University of Manchester professor who is also CSO of Unit M and Innovation Lead at Sister, the city’s latest innovation district.
To continue delivering new, sustainable solutions to power AI, more support is needed for re-skilling and up-skilling existing workforces and budding entrepreneurs. Startups need better access to AI talent pools, training opportunities, and access to funding and state of the art facilities and infrastructure to enable inward investment and job creation right across the UK.
In other words, creating an AI revolution that nurtures UK startups, aligns with net zero policy and doesn’t deliver societal shocks won’t be easy. But the government has made a start.
(All contributors were responding to emailed questions).
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