UK PM Unveils £400M Chip Initiative to Help British Startups Grow and Remain in the UK

Speaking at London Tech Week, Keir Starmer said that Britain was “uniquely placed to lead” the AI revolution.

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His remarks follow major investment announcements from U.S. semiconductor company Advanced Micro Devices (AMD), which pledged £2 billion to the UK over the next five years, and Dutch neocloud firm Nebius, which committed £1.7 billion to expand AI infrastructure and computing capacity across the country.

The prime minister said: “Britain is the third largest technology economy in the world. Our startups have raised close to half of all European investment in tech this year.”

Starmer said Britain faced three choices on dealing with the rise of AI: either “stick our head in the sand”, “remove the guardrails completely” or the path of “backing British businesses creating the jobs and technologies of the future”.

Starmer said: "Where British tech companies start here, scale here, and stay here. 

“But the rewards of their success are felt in communities right across the country.
 And where government is active in its approach towards tech."

The challenge of British startups relying on well-funded U.S. investors to support their growth has persisted for many years.

To address this issue, the UK government introduced the £500 million Sovereign AI Fund earlier this year, designed to help the country's most promising AI startups remain headquartered in the UK while expanding globally.

Building on that effort, Prime Minister Keir Starmer announced plans to strengthen the nation's sovereign computing capabilities through a significant investment in AI infrastructure. The initiative includes a £400 million commitment to procure specialist AI chips from UK-based companies, encouraging domestic firms to scale and remain in the country. This investment forms part of a wider £1.1 billion government strategy aimed at expanding the UK's homegrown AI computing capacity and reducing reliance on overseas technology resources.

In his address, the Prime Minister also emphasized the importance of AI safety, reminding technology companies of their responsibility to develop and deploy AI responsibly. He pointed to the government's intervention involving Grok earlier this year as an example of the need for oversight and accountability in the rapidly evolving AI sector.

Starmer said: “They allowed their tools to be used to create disgusting, explicit AI image. So we took them on. And all tech companies should know…If they fall short on their responsibility to keep people safe. We will act with the same decisiveness.”