UK sets up £500m AI fund

Britain has opened a £500 million Sovereign AI unit to invest directly in domestic artificial intelligence companies. (gov.uk) The Department for Science, Innovation and Technology launched the unit on April 16, 2026, with Technology Secretary Liz Kendall unveiling it at Wayve in London. The government said the fund will sit inside the department and act like a state-backed venture capital operation. (gov.uk) (publictechnology.net) The first equity investment will go to Callosum, an AI infrastructure startup, and six other startups will get access to the UK’s AI Research Resource supercomputer network. The government said that support package also includes visas, research and development help, and procurement access. (gov.uk) (publictechnology.net) The move extends the AI Opportunities Action Plan that the government published in January 2025 and updated on January 29, 2026. In that update, ministers said they had already set aside up to £500 million through the Sovereign AI Unit and paired it with a £2 billion plan to expand national compute capacity twentyfold by 2030. (gov.uk 1) (gov.uk 2) Ministers are framing the fund as industrial policy as much as startup finance. The government said too many British companies still struggle to turn research into large-scale commercial businesses and said the unit is meant to shift support from “fragmented” programs to long-term backing in strategic parts of the AI supply chain. (publictechnology.net) (gov.uk) The state support is not limited to buying startup shares. A parallel Strategic Assets Grants Programme opened on April 16 with £9 million in its first round for projects such as high-value datasets and automated laboratory infrastructure, and the grant notice says a larger programme of up to £160 million is planned later in 2026. (find-government-grants.service.gov.uk) James Wise, a partner at Balderton Capital, chairs the unit, according to the government’s delivery tracker and department briefings. The unit’s stated focus includes public services, national resilience and businesses that could deliver economic growth. (delivery.ai.gov.uk) (publictechnology.net) Kendall said Britain must be “an AI maker, not just an AI taker,” tying the fund to economic security and national security. The next test is whether the unit can turn public money, supercomputer access and procurement support into larger UK-based AI companies that stay in Britain as they scale. (gov.uk 1) (gov.uk 2)