Tech Firms Pledge $14.3B to Boost UK’s AI Infrastructure

In a significant push to bolster its AI ecosystem, the UK government has unveiled the “AI Opportunities Action Plan,” accompanied by a $14.3 billion (£14 billion) commitment from three leading tech firms. This initiative aims to establish the country as a global leader in artificial intelligence by investing heavily in data centers, public computing infrastructure, and AI-related jobs.

Norway-based startup Nscale, which secured a $155 million Series A funding round in December, is set to invest $2.5 billion over three years to develop the UK’s largest sovereign AI data center, expected to be completed by 2026. Meanwhile, US-based Vantage Data Center has pledged over £12 billion to build data centers across the country, and IT group Kyndryl is planning to create up to 1,000 AI-related jobs in Liverpool by 2028.

Building Growth Zones and Easing Development

The action plan introduces AI Growth Zones, areas designated to accelerate AI development and infrastructure. The first of these zones will be established in Culham, Oxfordshire—already home to the UK’s Atomic Energy Authority—with additional locations to be announced later in 2025.

To facilitate faster construction of data centers, the government will loosen planning regulations, a move expected to streamline the development of critical AI infrastructure.

Supercomputing and Public Investment

As part of its broader strategy, the government also revealed plans to construct a new supercomputer aimed at increasing public computing power twenty-fold by 2030. Notably, £1.3 billion in funding for supercomputer and AI projects was cut by the previous government last year, but the newly elected administration is positioning AI at the heart of its innovation agenda.

High-profile AI firms, including OpenAI and Anthropic, alongside prominent venture capital firms, have expressed support for the action plan.

“It’s encouraging to see Starmer’s government doubling down on AI infrastructure to drive growth and efficiency, with a focus on the application layer where Europe can excel,” said Robert Lacher, founding partner of Visionaries Club, a London-based early-stage VC fund. “Let’s hope this ambition translates into action—and sparks the rise of a new generation of AI category leaders in the UK.”

UK’s Position in the AI Race

According to PitchBook data, the UK led Europe in AI venture capital funding in 2024, with £4.5 billion invested. This figure is almost twice the total AI funding raised in France and three times that of Germany. Despite these achievements, the UK’s total funding still represents just over 5% of the US’s record £75.6 billion in AI investments last year.

While the action plan is a step in the right direction, many venture capitalists point out a persistent gap in growth-stage funding for AI startups in the UK and Europe.

“There is a big gap in the UK and Europe when it comes to growth-stage venture capital, which will fund this innovation,” said Luke Alvarez, managing general partner at Hiro Capital. “The companies that can power this stuff are very capital-intensive in the compute needed for training models, in the hardware, in the software development, the data centers, and the data. We simply don’t have anything like enough of that growth-stage VC funding here.”

A Growing Opportunity for Investors

With major tech firms investing in AI infrastructure and the government’s proactive stance, the UK is positioning itself as a leading destination for AI innovation. However, bridging the funding gap will be critical to realizing its vision of becoming a global AI powerhouse. The coming years will test whether these strategic initiatives can deliver tangible outcomes and attract the level of capital required to support the next wave of AI leaders.

Source: PitchBook