UK government plans to buy AI chips from British firms to stem tech exodus
The UK government will purchase AI hardware from domestic technology companies under a new strategy designed to prevent promising British firms from relocating abroad. Technology Secretary Liz Kendall will outline the "AI Hardware Plan" at London Tech Week, using public sector contracts to support semiconductor and AI infrastructure businesses.
Government officials are concerned that Britain's most successful chipmakers are disappearing. Graphcore, an AI chip specialist, was acquired by Japan's SoftBank. Alphawave IP agreed to a multi-billion-dollar takeover by US firm Qualcomm. Arm, the UK's most successful semiconductor company, listed its shares in New York rather than London.
One executive at a British AI company described the government's anxiety plainly: "They are terrified about us leaving."
How the plan works
Public bodies would purchase processors, networking equipment, and other AI-related hardware developed by UK firms. The equipment could be deployed in government services or incorporated into national AI computing facilities available to researchers and businesses.
Guaranteed government demand would help emerging companies attract investment and remain headquartered in Britain. Several British start-ups are developing alternatives to Nvidia processors, which dominate the global AI market.
The strategy also includes measures to improve access to financing and specialist skills for high-growth technology firms.
Broader concerns about foreign dependence
The announcement follows a £1 billion government commitment to expand Britain's AI computing capacity. Current public research infrastructure relies heavily on American hardware from Nvidia and Intel.
A recent parliamentary report raised concerns about the UK's reliance on foreign technology providers. The committee warned that excessive dependence on overseas suppliers-particularly Palantir, Microsoft, and AWS-could leave the country exposed to geopolitical risk.
Dame Chi Onwurah, the committee chair, called for stronger government backing of UK technology firms through procurement. She said achieving a "truly digital state" would require greater technological sovereignty.
Industry executives have warned that access to advanced computing infrastructure is becoming a strategic issue as geopolitical tensions rise.
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