UK opens £100 million contest for public sector AI

The UK government has launched the first procurement competitions under its £100 million Sovereign AI R&D Procurement Scheme, aiming to back British startups building tools for public services, national security and computing infrastructure. Announced by Chancellor John Healey at the G20 Finance Ministers and Central Bank Governors meeting in North Carolina, the programme is part of Sovereign AI’s push to help companies start, scale and compete from the UK.

The scheme is designed to lower barriers that often keep smaller firms out of public contracts, including requirements around turnover, reserves and track record. Upfront payments will be available where appropriate, and successful companies will retain intellectual property so they can develop products beyond government pilots.

The initial challenges cover NHS productivity, more efficient AI compute, secure integration of AI across defence environments, and security testing for AI agents with the National Cyber Security Centre. The government also plans to open the AI Economics Institute to cooperation with G7 countries, focused on information and evidence sharing where it is in the UK’s interest.