24 Months

Liz Kendall MP, Secretary of State for Science, Innovation and Technology

The steep part of the curve

The next 24 months will shape both AI, and Britain’s place in the world, like no period in our lifetime.

The compute used to train frontier AI models has grown four to five times every year for over a decade. The scale of growth has held with remarkable consistency: more compute, more data, better models, more capabilities. And at the same time, the cost of using AI has been falling by an order of magnitude each year.

That combination of capabilities going up and costs coming down so quickly is rare in history. When it happens - in steam, in electricity, in silicon - it does not reward the countries that wait.

I have been spending time this year with researchers at our best labs, and with the experts at our AI Security Institute (AISI). They all agree on this: we are in the steep part of the innovation S-curve. The models being trained now will not be marginally better, they are going to get very effective, very fast.

And as these AI models become more capable, they are expanding from just making the software we use smarter, to making our physical industries smarter as well. Advances in AI are already unlocking new technologies in transportation, robotics, automated labs and advanced materials.

Critically for Britain, this next phase of embodied AI isn’t something that can be built in an office in Kings Cross. It requires real industrial skill, complex machinery and links into intricate supply chains. This phase of AI should see far more of the investment, and ultimately benefits, spread across our country and with a much stronger connection to place, renewing the cities and regions that have led in previous technological waves, if we give them the powers to seize it.

So the question for Britain is not whether AI will change our economy, society and place in the world. It will. The question is whether Britain shapes that change in our interests, giving us the growth, the tools, the national pay rise we need. Or it is done to us without a say.

Be proud of where we stand

Britain is starting from strength. We have seen £13 billion of tech and AI investment in the UK so far this year alone. We have world-leading companies that the rest of the world envies: Wayve making access to transport cheaper and safer, Isomorphic designing more effective medicines, Fractile and Olix making chips that will make inference more affordable. We have the third-largest AI talent pool. We have the third-largest number of domestic datacentres, and in AISI a security institute that the world relies on.

We should be prouder of our place in this race. But pride cannot mean complacency. We have been here before. And we must be honest about what happened last time.

Three hard lessons

My time as Secretary of state has brought into focus three very hard lessons that we need to learn from as a nation.

First, Britain has lived through great technology waves in living memory, such as the internet and mobile. But Brits did not benefit enough. We had a great starting position: world-class scientists, early companies, and real momentum. But we did not do enough to help the companies we had to scale in a way that benefitted us all. They sold early, moved abroad, or were out-muscled by rivals whose domestic markets and governments backed them more. The jobs, the returns, the tax revenues went elsewhere. Discovery happened here, but the returns were banked by others.

Second, we need globally leading companies, producing AI products the world needs, to have a seat at the table. Right now, my department is working hard to make social media safer for young people. Our job is made vastly more difficult by the simple fact that none of the major social media companies were built and scaled here. We are negotiating with firms whose incentives, headquarters and lawmakers are an ocean away. If you want AI to work for British families and to respect our values, our privacy, our children, we need companies at the table who answer to Britain. We cannot let AI be a repeat of the social media story.

Third, it cannot be stressed enough how sovereign AI capabilities matter for our national security. I said in my speech at RUSI that access to advanced AI is as strategically significant as access to energy or ammunition. The assessments coming out of AISI have only strengthened my view. Frontier models are already meaningful in cyber offence and defence, and the gap between those who have them and those who do not is widening. A nation that cannot run, evaluate and secure advanced AI on its own terms has outsourced part of its defence and national security.

These are just some of the costs of not having frontier technology companies and infrastructure in our borders. We are still paying for previous mistakes. We cannot afford make the same mistakes again.

Make it count

So what do we do? Five things are vital, and we have started on all of them.

We invest in compute and hardware. AI runs on infrastructure. My recent announcements on our hardware programme are the start: backing British chip design, securing our supply chains, and building the training and inference capacity our companies and public services need. And if we want British data to be secure here in Britain — NHS records, defence data, the information of ordinary citizens, then we need more UK-based data centres, built faster, connected to the grid sooner, and located in the regions where investment will matter most, outside London and the South East.

We build a trillion-pound company. Not as a vanity project, but because a company that produces such a valuable part of the global AI economy is the ticket to a seat at the global table. That is why we set up the UK’s Sovereign AI Fund, SovAI, to accelerate our successes. It is hard. Of course it is. SovAI is a team taking real risks, and taking risks is something the government has not been good at. Some of its bets will fail. When they do, there will be criticism, and we will continue to back the team - because now is the time to be bold, not dither. Look at what that small team has done in just a few months, supporting some of the most exciting British AI companies like Callosum and Ineffable. Imagine what they will do in two years with more support behind them.

We back British companies. Government procurement should do more for our local champions. We know this model can work, because it built the most valuable technology company Britain has. Back in the 70s, when Britain’s old industrial base was crumbling, the Callaghan government invested in a high risk semiconductor start-up, Inmos, headquartered in Bristol and whose products were manufactured in Newport. That bold move sparked not just a company but an industry, leading to Graphcore and Isambard in Bristol, and to Wales’s amazing semiconductor cluster. And one team of Inmos alumni went to help build what is now Britain’s most valuable company: Arm. Out of that publicly backed bet came the chip designs whose architecture now sits in 99% of the world’s smartphones. One brave procurement decision, four decades ago, helped launch Britain’s most valuable company today. We should have made fifty such decisions since. Now, we have started making them again.

We make AI a priority across the whole of government. Every department will need a plan for how AI makes its services better, faster and cheaper - not glossy pilots, but measurable improvement in the services people actually use. But this can’t be done top down. Look at what is already happening when we let local trusts and clinicians adopt these tools. In East Kent, 85% of NHS clinicians are using an AI tool that spots infections early - catching sepsis sooner and saving lives at a fraction of the usual time and cost. Our clinicians need these superpowers. There are dozens of other examples, and they are multiplying by the day.

We enforce stronger AI sovereignty. SovAI addresses the early stage, and the British Business Bank helps with scale up capital. But we will also use every lever the state already holds, including government procurement that buys British where British is best, so our firms get the revenue and validation they need to scale. This is especially important in defence. And we can strengthen the CMA and other institutions with the tools needed to ensure the AI market stays open, contestable and fair, so the next great British company is grown here, not swallowed early.

Compute, private champions, public adoption, national sovereignty. We need to double our efforts on all of these fronts in the months ahead.

Who is AI for?

But do not mistake my urgency for fear. I am urgent because I have seen what these technologies do when they reach ordinary people. Because the story of the last thirty years is also the story of technology making things easier and cheaper.

Thirty years ago, if you were a child from a low-income family with no connections to investors, starting a business that sold to the world was a dream. Nobody could afford stock, or a store, or a shipping operation. Then came the internet and the smartphone. Suddenly a teenager anywhere in the UK could get their first taste of independence and commerce selling on platforms like Depop or eBay. Millions did.

Thirty years ago, if you were a young actor, musician or broadcaster without connections, the door to TV and radio was closed. Today, YouTube and Spotify have let millions of young Britons create, find an audience, and get a first foot on the ladder - no gatekeeper’s permission required.

And just a few years ago, if you dreamt of building a business, you needed tens of thousands of pounds for software developers, marketers and operations before you could begin. Only the already-wealthy could afford to try. Now, thanks to AI, anyone has the equivalent of a brilliant developer and a seasoned business adviser in their pocket for £20 a month.

These are powers that can transform lives. We can hand them to the next generation - or we can let others decide who gets them.

This is just as true in the public sector. At Citizens Advice, an AI assistant is helping advisers answer people’s questions in half the time, which means twice as many families getting help with debt, housing and benefits from the same overstretched service. Cheaper government thanks to AI is not a pipedream. It is a person getting help today instead of next month.

And it goes beyond the public sector. If we want to reindustrialise across this country - to regain our capability to build - we can only do it by embracing the technologies of the future. Leadership in AI is what lets us compete at the very frontier of new industries in robotics, fusion, quantum, life sciences, and technologies we cannot yet name. But they cannot be dictated to or planned top-down by us in Whitehall. Look at the CHIPS Act in the USA. The federal government set the targets, but it was the individual states who could compete to be the location for these new semiconductor fabs, creating highly skilled jobs in the process. These industries need energy, space, and skills, more independent regions can help make these abundant across the UK. That is how new life comes back to the regions that powered the last industrial age. AI is the enabler for growth everywhere.

No time to lose

Sovereign AI is urgent — because the prize is growth and hope in every part of the country — the two things we have been short of for many years. But the window in which we can still choose our place is measured in months, not decades.

We have the companies. We have the talent. We have the institutions. We have the tools.

Now we need the ambition, dedication and will to make the next 24 months count.