UK chip strategy targets £37bn ($50bn) AI hardware market share

TL;DR: Technology Secretary Liz Kendall’s RUSI speech committed the UK to drafting a national AI hardware strategy aimed at capturing 5% of a global AI chip market McKinsey forecasts could reach $1 trillion in the early 2030s. That share would translate to around £37 billion ($50 billion) in revenue and tens of thousands of jobs. The plan is not yet written. Supply-chain dependencies on Chinese-controlled critical minerals and a UK semiconductor workforce gap remain the harder problems.

Kendall framed the ambition through the UK’s historical chip credentials — the first programmable computer, the first electronic memory, ARM’s CPU architecture — while avoiding the reality that ARM’s most strategic value sits with its Cambridge IP licensing rather than any UK fabrication base.

The funding pipeline is real, the supply chain is not

Investment flows are concrete. UK AI startups raised £6 billion in 2025, the largest single share of UK venture capital, and pulled in $5.8 billion in Q1 2026 — 74% of all UK VC. Private commitments under the AI Growth Zone total £28.2 billion, with NVIDIA’s £11 billion AI factory pledge included. The state’s £500 million Sovereign AI Fund opened earlier this month.

The supply-chain reality is harder. Verb Ventures principal Alexey Bulygin told Tech Funding News that China controls 98% of global primary gallium supply and 83% of germanium, with controls extended to tungsten, tellurium, indium and seven heavy rare earth elements by early 2025. Bulygin’s blunter point: the UK can design good chips but lacks the local infrastructure to produce or test them at scale, meaning most manufacturing value would flow to Taiwan even if the IP stays British.

SkillStruct founder Michael Olatokun added a workforce caveat: the gap between UK AI demand and UK workforce readiness is widening, and a hardware strategy without a workforce-development pillar risks building policy on an empty skills base.

Looking forward

The £37 billion ($50 billion) figure gives Parliament a measurable benchmark to hold the government to — useful, but the EU’s experience offers a cautionary read: the European Court of Auditors estimates the EU will reach only 11.7% of the global market by 2030, well below its 20% target despite substantial spend. For UK SMEs in semiconductor adjacent supply chains — testing, packaging, photonics, cooling — the strategy creates demand-side signal but no near-term procurement pipeline. The next material milestone is the published plan and an answer on critical-minerals dependency. Until both arrive, the £37 billion target sits closer to political ambition than industrial roadmap.