The government has announced a sweeping package of artificial intelligence investments and reforms designed to accelerate economic growth, support national renewal and strengthen the UK’s position as a global leader in AI.
Placing AI at the heart of the UK’s Modern Industrial Strategy, ministers said the programme would unlock billions of pounds in private investment while enabling new opportunities for businesses, researchers and local communities. Central to the announcement is the creation of a major AI Growth Zone in South Wales, developed in partnership with Vantage Data Centers and Microsoft.
The zone — which spans multiple sites along the M4 corridor, including the former Ford Bridgend Engine Plant — will attract £10 billion in private investment and create more than 5,000 jobs over the next decade. It will serve as a hub for AI infrastructure, research and advanced digital industries, with further zones expected to launch in other regions.
Each Growth Zone will receive £5 million in government funding to help local firms adopt AI technologies and develop specialised skills in their workforce.
Sachin Agrawal, Managing Director for Zoho UK, said the government’s commitment to AI was both “timely and visionary”, and essential to ensuring innovation benefits are distributed fairly across the country. He warned, however, that businesses must complement adoption with the right culture, skills and governance.
“For businesses, the real opportunity lies not only in adopting AI tools, but in developing the skills, readiness and governance to apply them responsibly at scale,” he said. “AI literacy and strong data protection standards will be essential to ensure initiatives are credible and built for long-term impact.”
Agrawal said structured implementation — with clear pilot programmes supported by automation, security and strong oversight — would help organisations move “beyond experimentation” and generate sustainable competitive advantage.
To keep UK researchers and startups at the forefront of global AI development, the government is also launching a programme to expand free and low-cost compute access, with up to £250 million earmarked to help train advanced models and accelerate scientific breakthroughs.
Alongside this, ministers announced a £100 million advance market commitment that will allow the government to act as an early customer for UK AI hardware startups. The scheme is designed to support domestic chip innovation and ensure British-designed hardware is incorporated into the next generation of data centres.
