The UK’s Road to Becoming an AI-Driven Economy

23 June 2025

The United Kingdom is accelerating its transformation from an “AI taker” to an “AI maker” in a move central to its Industrial Strategy.

With Artificial Intelligence poised to disrupt every major sector, the UK’s shift is not only about competitiveness but about securing long-term economic resilience and productivity.

The government sees AI as foundational to reshaping the UK economy, aspiring to make the country one of the top three destinations globally to build and scale technology businesses by 2035.

Tackling the AI Adoption Gap

Despite AI’s potential, adoption across UK businesses remains uneven. Just 18% have integrated AI technologies, with SMEs especially underrepresented.

According to the Technology Adoption Review, this lag is linked to persistent challenges: lack of finance, insufficient management skills, regulatory ambiguity, and limited awareness of AI’s practical applications.

The economic implications are significant. Raising AI adoption could boost UK GDP by 8% by 2035, with AI itself expected to account for nearly half that growth.

Building an “AI Ready” Nation

To overcome these barriers, the UK has launched a sweeping strategy aimed at embedding AI across the economy.

Key pillars include infrastructure investment, data mobilisation, upskilling, and regulatory reform all underpinned by substantial public and private funding.

Key Strategic Interventions

AI Infrastructure & Compute Power:
Expansion of the AI Research Resource (AIRR) is underway, with a 20x capacity increase by 2030. A new supercomputer at the University of Edinburgh, backed by £750 million, will anchor the UK’s AI and tech cluster development. Additional funding supports AI-enabled scientific research.
Sovereign AI Unit:
Positioned within government and funded with up to £500 million, this unit will ensure the UK retains a strategic stake in frontier AI, offering compute, data, and capital access in partnership with industry.
AI Growth Zones:
Specially designated regions such as Culham, Oxfordshire, are receiving infrastructure and planning fast-tracks to support AI innovation hubs.

Data as a Strategic Asset

The UK is treating data as a core economic lever. Key initiatives include:

National Data Library (£100M+): A secure platform to support innovation across sectors.
Health Data Research Service (HDRS) (£600M): A national-scale platform combining genomic, clinical, and diagnostic data, positioning the UK as a global leader in health AI trials.
Creative Content Exchange (CCE): A trusted marketplace for digital creative assets, enabling legal access for AI developers.
Smart Data Schemes (£36M): Secure consumer data sharing across industries, modelled on Open Banking.

Closing the Skills and Talent Gap

To scale AI adoption and talent, the government is targeting both foundational education and elite recruitment:

AI Skills Hub (2025): A sector-specific initiative bringing together industry and training providers.
£187M for Digital Education: Embedding AI and tech literacy into classrooms nationwide.
7.5 Million Workers to Be Trained: In partnership with Google, NVIDIA, Microsoft.
Global Talent Taskforce & Fund: With £54M to attract elite researchers and new Turing AI Fellowships worth £25M for overseas AI leaders building teams in the UK.

Pro-Innovation Regulation

The Regulatory Innovation Office (RIO) is tasked with creating an agile regulatory environment.

This includes a commitment to reduce regulatory burden and cut administrative costs by 25%, ensuring the UK remains competitive as AI evolves.

Sector-Wide Integration: AI in the IS-8

AI’s impact is being embedded across the government’s eight high-growth sectors (IS-8): Advanced Manufacturing, Clean Energy, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services.

For example, the Ministry of Defence has committed to spending at least 10% of its equipment budget on emerging technologies, including AI.