Industry leaders have warned the Chancellor that Britain risks becoming dangerously dependent on foreign technology giants unless the government establishes a comprehensive strategy for its own AI capabilities, ahead of the Budget on Wednesday.
UKAI, which represents more than 270 AI businesses, has urged John Healey to pledge substantial investment in a national sovereign AI strategy, cautioning that the country could become a "vassal state" reliant on overseas powers for critical technology.
The alert comes just days after the Treasury revealed more than £600m in AI investment, including additional funding for British startups and domestic chip design.
However, the trade body contended that successive funding announcements had fallen short of tackling the wider issue of Britain's reliance on foreign companies for the AI models, computing infrastructure and services underpinning its economy.
Call for a Unified Strategy
"The UK has some of the world's best AI companies, yet no Sovereign AI strategy to help them thrive", said Tim Flagg, UKAI's chief executive.
"The AI Opportunities Action Plan, the Sovereign AI Fund and the AI Hardware Plan are all welcome steps, but nothing joins them together. On their own, they are building blocks. Joined up as a strategy, they would be transformative".
He cautioned that without swift intervention, Britain risked becoming a "vassal state, dependent on countries that control the AI infrastructure our economy increasingly relies on".
Pressure Builds Over Britain's AI Dependence
The warning comes in the wake of significant disruption caused by a recent Google Cloud outage, which UKAI said affected banks, businesses and courts, highlighting the dangers of depending on a handful of overseas providers.
It also emerges amid mounting concern over Britain's vulnerability to geopolitical tensions and the dominance of American technology firms in the global AI market.
Charlotte Wilson, head of enterprise at cybersecurity firm Check Point, said the government needed to look beyond individual funding commitments.
"Without a dedicated sovereign plan in place, the UK will continue to be at the mercy of overseas tech firms, subjected to damaging outages and major cyber security scares", she said.
"Piecemeal funding announcements are tactical at best, and we need a detailed strategy about how the country will build and design a new wave of AI tools to support critical national infrastructure".
Wilson argued that cultivating domestic AI capabilities should also form part of Britain's defence spending strategy, particularly as cyber threats from hostile nations continue to intensify.
Government's Existing Investments
The calls follow a warning from the government's Council for Science and Technology that Britain risks becoming a "high-value AI customer" rather than a producer of critical technology unless ministers bolster domestic capabilities.
The government has already established a £500m Sovereign AI Fund to assist British startups in scaling up, with the Treasury announcing a further £60m for the programme on Saturday. A further £60m will be directed towards the research and procurement of British AI technology, with £18m set aside for a new advanced chip-design academy.
The broader package encompasses £165m for a national AI biosecurity initiative, supported by OpenAI, Anthropic and Google DeepMind, alongside £130m for AI-driven cybersecurity projects.
Healey stated that the investment would help deliver a "distinctively British approach to AI" that safeguards national interests while bolstering economic growth.
AI minister Kanishka Narayan also recognised the dangers of overseas dependence, cautioning that Britain could not "afford to rely entirely on technology built overseas".
Nevertheless, UKAI is urging the government to consolidate its existing initiatives under a single unified strategy, underpinned by dedicated funding and reforms to public procurement that would grant British AI firms greater access to government contracts.
Flagg argued that Britain possessed the entrepreneurs, research and talent to compete globally, but that these assets remained "fragmented and disconnected".
"The government can change that by uniting and championing British AI businesses and reforming public procurement, so that taxpayer money builds British growth and British jobs", he said. "Next week's Budget is the moment to act".
