TL;DR

Chancellor John Healey set out an AI spending package on 24 October that he will take into next week’s Budget. techUK puts the total above £600 million. Security takes the largest share, from a new biosecurity lab to a bigger budget for AISI and AI tools for cyber defence. The rest backs UK AI firms, chip-design skills and local adoption, plus £10 million a year to study how AI will change jobs.

Security first

The biggest single item is £165 million for the new National AI Biosecurity Initiative, which includes the £100 million AI Biosecurity Lab. The AI Security Institute receives a further £120 million for testing and standards work.

Two cyber measures follow. A £60 million National Cyber Shield will apply agentic AI to defence and sets aside £25 million for a challenge fund, plus scoping for a regulatory sandbox for agentic security tools in critical infrastructure. Separately, a £70 million centre called NERV (National Exposure and Real-Time Vulnerability) will use AI to find weaknesses across infrastructure and the wider economy. Ciaran Martin, who used to run the NCSC, said the week had brought “a stark reminder that AI exposes some of our digital world’s weaknesses”. Our earlier report covers the NCSC response to AI-found PHP flaws.

Home-grown firms and local growth

The Sovereign AI Fund gains £60 million to invest directly in UK companies, expanding into physical and industrial AI such as robotics and advanced manufacturing. Another £60 million goes to its R&D procurement scheme for health, care and AI assurance. A UK Advanced Chip Design Academy gets £18 million.

For the regions, £30 million will start local AI partnerships run by Mayoral Strategic Authorities, bringing councils, colleges and businesses, SMEs included, together on adoption and skills. Manchester will host a new NCSC centre of excellence to train government cyber and AI specialists. The AI Economics Institute receives £23 million over three years, and a £15 million AI Challenge Prize will reward tools that fix everyday problems, starting with health.

Looking Forward

The jobs research money signals how ministers want the package read. Healey framed it as “a distinctively British approach to AI” that does not “leave workers behind”. In our view, the security spending is the most concrete part. The adoption measures are smaller and spread thinly, so SMEs should watch whether the mayoral partnerships come with practical support or only convening. The BCC (British Chambers of Commerce) told the Financial Times that ministers still need to tackle barriers to adoption across all firms.