17 January 2025

The UK is at a crossroads – we need to seize AI’s potential

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The Government’s response to the AI Opportunities Action Plan is an ambitious declaration of intent, laying out the foundations for the UK’s leadership in AI. It is a rare instance of bold policymaking and, for the Labour Government, it represents a much-needed triumph. But its success will depend on execution, bold thinking and a willingness to address blind spots.

UK Day One pushed for many of the recommendations adopted in the plan in our reports, from building national compute capacity to competitively awarding compute and data access to British researchers and startups. The emphasis on using procurement as a market-shaping tool and prioritising the attraction and support of domestic and international AI talent further echoes ideas we have championed. Seeing these proposals reflected in government strategy is a promising moment for those who, like us, are invested in the UK’s technological future.

What’s Working: Compute, Growth Zones, and Procurement
Central to the Government’s plan is an expansion of compute capacity. The commitment to increase sovereign compute resources 20-fold by 2030, alongside investments in the AI Research Resource, is the kind of long-term planning that has been missing from the UK’s tech strategy for years. What is truly unique and innovative, however, is its plan to use expert programme directors to competitively award compute – an approach to resource allocation inspired by DARPA and ARIA.

Equally promising is the introduction of AI Growth Zones. These zones, if they deliver enhanced energy access and planning flexibility, could become magnets for private-sector investment and allow for some experimental thinking in planning and energy policy, which may yield positive spillovers. The pilot at Culham, if paired with serious commitments to nuclear power for AI applications, could set the stage for energy investments.

The proposed ‘Scan > Pilot > Scale’ procurement model is also interesting. For too long, public-sector procurement has been a labyrinth of inefficiency that unfairly discriminates against newcomers. A framework that allows for rapid prototyping and scaling successful projects – and one that knows how to work with startups and firms at the leading edge of innovation – will be a welcome change.

What’s Missing: A Commitment to Energy Abundance
Energy policy remains the Achilles’ heel of this strategy – none of the ambitions set out by the plan will be reached without rapidly scaling the UK’s energy supply. And the proposed AI Energy Council, while conceptually sound, lacks the authority and clarity necessary to drive substantial change.

What the strategy needs is a decisive approach to energy abundance. This means clearing regulatory hurdles for large-scale nuclear projects to establish a reliable energy backbone. Simultaneously, AI companies should be encouraged to develop private energy solutions, as seen in the US, where firms are taking proactive steps to meet their computational energy needs. Energy abundance is good for AI, and good for consumers and the economy as a whole.

Where It Wobbles: International Talent and Regulation
The Government’s reticence to fully commit to high-skilled immigration reforms weakens the response. The UK’s visa system is expensive, slow and ill-suited to attracting top global talent in a fiercely competitive market. Our AI sector has been successful so far chiefly because London is able to attract top talent, especially from abroad – we should be leaning into this strength. Political anxieties around immigration often overlook the broad public support for welcoming highly skilled workers who can contribute to growth and innovation.

More concerning is the approach to text and data mining regulations. A consultation that leads to alignment with restrictive EU frameworks would hinder home-grown innovation without affecting how models are trained abroad. Strict regulations may also delay AI model deployment in the UK and undermine tech diffusion and adoption, which would harm the competitiveness of UK firms. As we’ve argued, a more flexible approach, such as adopting a fair-use framework, would empower researchers and companies while ensuring the UK remains a leader in AI.

Questions That Remain
The success of this plan will hinge on answers to several questions. How will the Government ensure Sovereign AI partnerships deliver meaningful results? Can the Alan Turing Institute adapt to the rapid pace of AI development, or does it need an overhaul to remain relevant? What criteria will define the expansion of AI Growth Zones, and how will regional inequalities be addressed?

AI presents a historic opportunity to transform public services, supercharge economic growth and redefine Britain’s place in the world. The response to the AI Opportunities Action Plan is something to be proud of and a step in the right direction, but the harder work lies ahead. The UK can claim a place at the frontier and, in doing so, provide prosperity and dignity for its people – but it won’t be easy.

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Julia Willemyns is the founder of UK Day One.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.