John Healey will announce a package of AI investment in his first Budget on Wednesday, including £165m for a new National AI Biosecurity Initiative and an additional £120m for the AI Security Institute, the Treasury said.
The measures, set out by HM Treasury on Saturday, also include £10m a year to lead the UK’s work on understanding how AI will reshape jobs and industry and how Britain needs to prepare for it. The Treasury said the money would address concerns about AI replacing jobs and make sure government is best placed to help people into jobs in future.
According to the Treasury, the investment will cut UK dependence on other countries to bolster the nation’s security and resilience, while supporting home grown businesses and talent. It said the package would also boost the UK’s ability to build its own chip design and cyber defences.
The biosecurity initiative includes £100m for what the government describes as a world-first AI Biosecurity Lab, which will apply AI to the detection and surveillance of biological threats. A further £65m will go towards strengthening bio surveillance and developing medical countermeasures for priority pathogens.
The Cabinet Office said the lab will operate as an independent, non-profit organisation and will launch with up to £200m in commitments from OpenAI and Anthropic, in the form of compute, model credits and technical support. Google DeepMind and Basecamp Research will partner with the lab on research collaborations.
The package also includes £60m for a National Cyber Shield and £70m for a new National Exposure and Real-Time Vulnerability (NERV) Centre. In its announcement of the AI plan, the Treasury said the Cyber Shield will use agentic AI to improve UK cyber defences and will include a £25m challenge fund for UK AI and cyber security innovators. The NERV Centre will deploy AI tools to identify cyber vulnerabilities across critical infrastructure and the economy.
An additional £60m will go to the Sovereign AI Fund to enhance its ability to invest directly in promising UK AI companies. A further £60m will support Sovereign AI’s R&D Procurement Scheme, and £18m will fund a new UK Advanced Chip Design Academy.
The Treasury said the fund will expand into a new focus area of physical and industrial AI, covering fields such as robotics, autonomous systems and advanced manufacturing. The government’s £500m Sovereign AI fund was launched in April.
The Treasury also listed £30m for local AI partnerships with mayoral strategic authorities, which it said would support local businesses, including SMEs, and give workers AI skills.
Healey said: “AI will transform daily life, every firm, community, hospital, school, and every aspect of our economy can benefit.
“I understand and share the concerns of working people, so I am setting out a distinctively British approach to AI, one that doesn’t leave workers behind and defends our national interest, while ensuring the benefits of AI-enabled growth are felt right across the country.”
Kanishka Narayan, the AI minister, said: “Our new AI Biosecurity Lab will be a major new global institution, bringing together world-leading scientific expertise to protect people from emerging biological threats and ensure Britain leads the world in AI safety and security.
“We cannot afford to rely entirely on technology built overseas.
“By backing British science, advanced chips and our own AI companies, we can strengthen our national security, rebuild Britain’s industrial strength and create good, skilled jobs across the country.”
Dan Jarvis, the security minister, said: “Today’s investment will help the UK seize the opportunities AI presents to strengthen our national security, while staying one step ahead of those who seek to use AI to do us harm.”
Julian David, chief executive of techUK, said in comments published by the Treasury: “This is a strong £600m+ package focused on AI adoption, trust and security, investment and AI’s impact on jobs and society.”
The AI measures are among the first details of a Budget for which economists have said Healey will need to find about £10bn in tax rises or spending cuts.
Amy Ingham
Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College’s journalism school. Her recent reporting includes British Steel’s nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.
Leave a comment