Chancellor John Healey used his maiden Budget on Wednesday to commit more than £700m to AI safety and British technology firms, including a new £40m unit to tackle rogue AI systems and £165m for biosecurity.
Chancellor John Healey used his maiden Budget on Wednesday to commit more than £700m to AI safety and British technology firms, including a new £40m unit to tackle rogue AI systems and £165m for biosecurity.
The package, much of which was trailed ahead of the Budget, includes £120m for the AI Security Institute and a National Agentic Security Unit tasked with detecting and responding to AI systems operating outside their intended controls.
Healey told MPs that "nowhere is the necessary role for the state clearer than in AI", pledging an approach built on security and sovereignty. The Treasury said AI could add between 0.4 and 1.3 percentage points to annual UK productivity growth over the next decade, citing OECD estimates, but warned the technology also posed risks to online safety and national security.
The £40m unit will develop capabilities to monitor rogue AI agents and respond to incidents as autonomous systems spread through businesses and public services. A further £70m will establish a National Exposure and Real-Time Vulnerability Centre to identify weaknesses across critical infrastructure, while £60m will fund a National Cyber Shield using AI to strengthen Britain's cyber defences. The government also committed £24m to improving cyber security across public services, including hospitals, schools and local authorities.
Ministers will consult next year on where liability for cyber breaches should fall and how to tackle insecure technology at source. The £165m National AI Biosecurity Initiative includes £100m for a laboratory to detect biological threats, supported by up to £200m in model credits from OpenAI and Anthropic.
The Budget also confirmed an additional £60m for the Sovereign AI Fund, £60m for AI procurement and £23m for research into the technology's economic impact. The Ministry of Defence is exploring plans to expand sovereign computing capacity on its secure estate.
Industry figures offered a cautious welcome. Tarek Nseir, co-founder of Valliance, said: "The government is right to take AI safety seriously, and the Budget is an opportunity to make responsible adoption a practical business priority too." Richard Thompson, chief executive of digital transformation firm ANS, warned that economic resilience could be undermined if businesses could not trust the technology.
Others questioned whether the investment would reach domestic companies. Mark Boost, chief executive of cloud provider Civo, said the government had set out "genuine ambition" but warned: "If public spending continues defaulting abroad, AI will be running on foreign providers' platforms, with all of the value produced flowing overseas". Jonny Williams, chief digital adviser for the UK public sector at Red Hat, said the Budget recognised the importance of digital sovereignty but "falls short of offering the pragmatic solutions needed to bolster it today", urging greater use of open standards in public procurement.
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UK Budget 2026 AI funding commitments by programme, £m
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Source: City AM
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Analysis
Why This Matters
The Budget cements the state's role in overseeing AI, funding new institutions to monitor autonomous systems, protect critical infrastructure and detect biological threats.
Businesses deploying AI still face unresolved questions, with ministers to consult next year on where liability for cyber breaches should fall and how to tackle insecure technology at source.
The Treasury's estimate that AI could lift annual productivity growth by up to 1.3 percentage points makes the technology central to Britain's economic plans, yet industry figures question whether the spending will reach domestic suppliers.
Background
The Budget is John Healey's first fiscal statement as Chancellor. It builds on the AI Security Institute, the body at the centre of Britain's efforts to defend against increasingly powerful AI models, and extends the state's role from safety into national security, with funding for cyber shields, vulnerability centres and biosecurity laboratories. The package also reflects a policy push toward digital sovereignty, reducing reliance on overseas technology suppliers at a time when autonomous systems are entering public services.
Key Perspectives
Tarek Nseir, co-founder of Valliance: welcomes the focus on safety and calls for responsible adoption to become a practical business priority.
Richard Thompson, chief executive of ANS: warns economic resilience could be undermined if businesses cannot trust the technology.
Mark Boost, chief executive of Civo: says the Budget sets out "genuine ambition" but warns that AI value will flow overseas if public spending keeps defaulting to foreign providers.
Jonny Williams, chief digital adviser for the UK public sector at Red Hat: says the Budget "falls short of offering the pragmatic solutions needed to bolster it today" and urges open standards in procurement.
What to Watch
The consultation next year on liability for cyber breaches and how to tackle insecure technology at source, which will determine where responsibility falls for AI-related failures.
Whether the Ministry of Defence's exploration of sovereign computing capacity on its secure estate becomes funded programmes.
Whether the promised investment translates into contracts for domestic companies, the key question raised by the cloud industry.
12 claims in this story checked against 1 source: 12 supported.
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SupportedHealey’s maiden Budget pledges more than £700m for AI safety and British technology firms.City AM: “John Healey has unveiled more than £700m in funding for AI safety and British tech firms”
SupportedThe Budget includes a new £40m unit to tackle rogue AI systems.City AM: “including a new £40m unit to tackle rogue AI systems”
SupportedThe Budget includes £165m for biosecurity.City AM: “includes £120m for the AI Security Institute and £165m for biosecurity”
SupportedHealey used his maiden Budget on Wednesday.City AM: “In his maiden Budget today”
SupportedHealey told MPs, “nowhere is the necessary role for the state clearer than in AI”.City AM: “Healey told MPs that “nowhere is the necessary role for the state clearer than in AI””
SupportedTarek Nseir said, “The government is right to take AI safety seriously, and the Budget is an opportunity to make responsible adoption a practical business priority too.”City AM: ““The government is right to take AI safety seriously, and the Budget is an opportunity to make responsible adoption a practical business priority too,” he said.”
SupportedMark Boost said the government had set out “genuine ambition”.City AM: “Mark Boost, chief executive of British cloud provider Civo, said the government had set out “genuine ambition””
SupportedBoost warned: “If public spending continues defaulting abroad, AI will be running on foreign providers' platforms, with all of the value produced flowing overseas”.City AM: ““If public spending continues defaulting abroad, AI will be running on foreign providers’ platforms, with all of the value produced flowing overseas””
SupportedJonny Williams said the Budget recognised the importance of digital sovereignty but “falls short of offering the pragmatic solutions needed to bolster it today”.City AM: “said the Budget recognised the importance of digital sovereignty but “falls short of offering the pragmatic solutions needed to bolster it today””
SupportedThe Treasury said AI could add 0.4 to 1.3 percentage points to annual UK productivity growth over the next decade.City AM: “The Treasury said AI could add between 0.4 and 1.3 percentage points to annual UK productivity growth over the next decade”
SupportedThe National AI Biosecurity Initiative includes £100m for a laboratory to detect biological threats.City AM: “The £165m National AI Biosecurity Initiative includes £100m for a laboratory to detect biological threats”
SupportedThe laboratory is supported by up to £200m in model credits from OpenAI and Anthropic.City AM: “supported by up to £200m in model credits from OpenAI and Anthropic”