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Government plans ‘to use public-sector demand’ to boost UK AI sector

The UK Department for Science, Innovation and Technology announced plans to use public-sector procurement of AI systems to boost domestic AI hardware companies, citing the AI Research Resource supercomputer and AI Growth Zones as key opportunities. The strategy aims to provide demand signals, validation, and deployment pathways for UK firms, reducing market risk and enabling scaled adoption.

read4 min views19 publishedJun 17, 2026
Government plans ‘to use public-sector demand’ to boost UK AI sector
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DSIT’s UK AI Hardware Plan says government procurement of artificial intelligence systems should be an accelerator for the development and adoption of UK products, supporting domestic firms in the process

The Department for Science, Innovation and Technology has said public-sector procurement of artificial intelligence solutions can and should be used to support UK tech companies to establish themselves as global players.

According to the department’s just-published UK AI Hardware Plan, government has a key strategic role to play by providing demand signals, validation and a pathway to scaled adoption – at the same time as setting expectations for performance and security in the systems it procures.

The AI Hardware Plan sets an objective to “use public-sector demand to accelerate the development and adoption of UK AI hardware” while ensuring that products are not only developed in this country, but also deployed in its growing public AI infrastructure.

The document says many UK companies will struggle to move projects beyond prototype stage without “credible early customers and routes into deployment”. However, it says that public-sector investment plans can provide those lifelines.

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It cites the AI Research Resource suite of advanced supercomputers and the development of AI Growth Zones as projects that will require “significant investment” in advanced hardware, creating “a major opportunity to shape demand” in the process.

“As government becomes an increasingly significant user of AI, public cloud infrastructure will also require enhanced AI capability, creating further opportunities to deploy technologies at scale through government procurement,” the plan states.

The AIRR project includes the development of a £750m AI supercomputer. The project budget includes a £400m procurement opportunity for specialised chips and other advanced hardware.

“This will create a significant commercial opportunity for AI hardware companies, including the strong pipeline of UK firms, and support the deployment and scaling of new technologies in the UK,” the * AI Hardware Plan* says.

The plan adds that defence is another area where procurement can be used as a “strategic lever” for AI hardware innovation.

“As the importance of AI in the military domain grows, it will be essential to develop more strategic and ambitious approaches to delivering the hardware capabilities that underpin this,” it says. “Some defence use cases also require technologies that meet exacting requirements for national control and assurance, creating new opportunities for UK-based AI hardware companies.”

The plan says that public procurement can create opportunities for UK companies to deploy their technologies in real-world systems, reducing “market risk”, providing revenue visibility and enabling firms to validate their performance “at scale”.

It adds: “This validation and early demand will drive further adoption at hyperscale in AI Growth Zones and globally, where much of the value will be generated. By linking procurement to national compute investments, we will provide opportunities for UK companies to deploy and validate technologies in cutting-edge environments, generating strong demand signals and supporting wider commercial adoption. This will help enable more powerful and energy-efficient systems to be adopted early and improve performance and help broaden the supplier base for UK AI infrastructure, strengthening technological sovereignty and long-term resilience.”

‘Choosing to compete fiercely’

Elsewhere, the plan references a £120m investment in AI hardware innovation, which includes a new £18m research and development programme for hardware security. Part of that involves collaboration across government, industry and academia with the aim of “bridging the gap between research and commercial integration and strengthening the UK’s broader hardware security capabilities”.

The plan also cites ongoing work with employers to identify pathways into semiconductor and AI hardware careers that is being led by Skills England, the Department for Work and Pensions, and the UK Semiconductor Centre.

Technology secretary Liz Kendall described the plan as a “long-term commitment” to securing the foundations of the nation’s AI economy, making sure the UK is not only a participant in global supply chains, but a country with enduring capability, resilience and influence within those supply chains.

“The UK has a clear choice: to remain dependent on technologies developed and controlled elsewhere, or to act with ambition – building the capabilities, international partnerships and leadership needed to compete fiercely and secure its place in the future of AI hardware,” she said. “This plan is about choosing the latter.”

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