Industrial Strategy 2025 – What Does it Mean for AI?

techUK sets out a summary of the Industrial Strategy published on Monday 23 June. Click here for our analysis of the Digital and Technologies sector plan. We are also hosting a webinar on 27 June 2025 deep diving into what the tech sector needs to know. 

As part of these announcements, the Government has proposed key recommendations designed to take forward its AI Opportunities Action Plan and to fulfil the Prime Minister’s mission of being an AI maker, not an AI taker. These include the headlines below. Key questions remain about the structure of initiatives like the National Data Library as well as the locations of AI Adoption Hubs and Growth Zones.  

As ever, techUK is committed to working alongside Government to ensure that these announcements are now put into practice to deliver AI-enabled societal and economic benefits. 

Key Announcements from Industrial Strategy and Related Documents 

A Sovereign AI Unit to Support the UK’s AI Sector 

Government has allocated £500 million to establish the new Sovereign AI unit, as announced in June’s earlier Spending Review. This funding will support the unit’s collaboration with the British Business Bank to enhance: 

• Access to data and compute resources; 
• Development of AI talent; and, 
• Growth of a stable, scalable private sector for AI; 

According to the Industrial Strategy, success will be measured by investment leveraged, number of start-ups supported, partnership outcomes, and AI research rankings. 

A Timeline for AI Growth Zones 

The Government has committed to a clear timeline for the rollout of AI Growth Zones: 

• 2025: Selected AI Growth Zones announced 
• 2026: Construction begins 
• 2030: Zones are fully operational 

These AI Growth Zones aim to foster innovation, create high-skilled jobs, expand public compute capacity, and align with the UK’s Net Zero Targets. 

AI Adoption Fund and Regional Hubs 

The Government clarified what the AI Adoption Fund could look like, following its announcement in the Spending Review. The aim of this to-be-determined pot of money is to support high-growth potential firms as they develop cutting-edge AI solutions.  

Additionally, the Government’s Digital and Tech Sector Plan includes a commitment to launch a network of regional AI Adoption hubs in 2026. These hubs will provide tailored and regional support to support UK businesses as they implement AI-enabled operations. 

Further initiatives announced include: 

• Expansion of the Made Smarter programme to integrate AI into professional and business services.  
• A new Digital Standards Strategy to accelerate tech adoption and boost productivity. 

We await more details about the AI Champions recommended in the AI Opportunities Action Plan. In their response to the plan in January 2025, the Government committed to appointing these champions in the target sectors of the Industrial Strategy as part of their greater work on identifying AI adoption opportunities to drive growth. 

Nearly £2 Billion to Expand AI Compute Capacity 

The Government reaffirmed its commitment to scaling AI infrastructure, as previously trailed in the Spending Review, with: 

• £1 billion to increase the UK’s AI compute capacity at least 20-fold via the AI Research Resource 
•  £750 million to develop a supercomputer in Edinburgh 

The Government’s long-term compute strategy is expected later this year. 

A Copyright Framework That Supports AI Innovation 

To balance AI innovation and support rightsholders, the Government is developing a new approach to an AI and copyright framework. This is expected to include measures that support licensing in the digital age while enabling continued access to creative material for AI innovators. Key actions include: 

• Establishing expert working groups 
• Conducting a detailed economic impact assessment 
• Publishing a report on AI training, transparency and technical standards. 

Multi-million Pound Commitments to Unlock Data 

Recognising data as a cornerstone for AI innovation, the Government announced: 

• Over £100 million to back the National Data Library: an AI Action Plan recommendation to open up more secure, interoperable, and accessible high-quality data sets for the tech sector 
• £36 million to launch Smart Data schemes in transport, digital markets and property to enable secure data sharing with authorised third parties. 

More Programmes to Bolster AI Skills 

During London Tech Week, the Government unveiled partnerships with 11 leading companies to train 7.5 million people in AI skills by 2030. 

To expand its focus on developing a strong workforce for AI, the Industrial strategy included additional measures, including: 

• Expanding the AI skills hub to work better with industry and technology partners 
• A Global Talent Taskforce to attract world-class talent to the UK 
• New short courses through the Growth and Skills Levy to develop the England’s AI and digital skills base. 

Commitment to AI Assurance 

The Government pledged to accelerate innovation and investment in AI assurance, promoting safe and responsible AI adoption. Proposed initiatives include: 

• A skills and competency framework 
• An AI Assurance Innovation Fund 

What This Package Means for the UK’s AI Sector 

techUK sees this as an optimistic set of announcements that could improve AI adoption and increase model development in the UK. 

While the announcements themselves are a clear signal that the UK Government is taking the AI Action Plan seriously, it is important to note that the devil will be in the details. We are still awaiting critical information on how initiatives – like the National Data Library, AI Growth Zones, AI Champions, and AI adoption hubs to name a few – will be designed and implemented.  

We are proud that much of techUK’s positioning has been reflected in how the Industrial Strategy talked about AI and we look forward to working with government in how we now take these announcements forward. It is clear that the success of the Industrial Strategy on AI depends on whether we as a society can work together to responsibly move towards economy-wide AI adoption.  

If you would like to get involved in techUK’s work on AI adoption and taking forward the UK Government’s AI Opportunities Action Plan or its related announcements, please contact Kir Nuthi (Head of AI and Data at techUK) at [email protected] and Usman Ikhlaq (Programme Manager for AI) at [email protected] 

Authors

Usman Ikhlaq

Programme Manager, Artificial Intelligence, techUK

Usman joined techUK in January 2024 as Programme Manager for Artificial Intelligence. 

He leads techUK’s AI Adoption programme, supporting members of all sizes and sectors in adopting AI at scale. His work involves identifying barriers to adoption, exploring solutions, and helping to unlock AI’s transformative potential, particularly its benefits for people, the economy, society, and the planet. He is also committed to advancing the UK’s AI sector and ensuring the UK remains a global leader in AI by working closely with techUK members, the UK Government, regulators, and devolved and local authorities.

Since joining techUK, Usman has delivered a regular drumbeat of activity to engage members and advance techUK's AI programme. This has included two campaign weeks, the creation of the AI Adoption Hub (now the AI Hub), the AI Leader's Event Series, the Putting AI into Action webinar series and the Industrial AI sprint campaign. 

Before joining techUK, Usman worked as a policy, regulatory and government/public affairs professional in the advertising sector. He has also worked in sales, marketing, and FinTech. 

Usman holds an MSc from the London School of Economics and Political Science (LSE), a GDL and LLB from BPP Law School, and a BA from Queen Mary University of London. 

When he isn’t working, Usman enjoys spending time with his family and friends. He also has a keen interest in running, reading and travelling.

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Kir Nuthi

Head of AI and Data, techUK

Kir Nuthi is the Head of AI and Data at techUK. 

She holds over seven years of Government Affairs and Tech Policy experience in the US and UK. Kir previously headed up the regulatory portfolio at a UK advocacy group for tech startups and held various public affairs in US tech policy. All involved policy research and campaigns on competition, artificial intelligence, access to data, and pro-innovation regulation.

Kir has an MSc in International Public Policy from University College London and a BA in both Political Science (International Relations) and Economics from the University of California San Diego.

Outside of techUK, you are likely to find her attempting studies at art galleries, attempting an elusive headstand at yoga, mending and binding books, or chasing her dog Maya around South London's many parks.

Email:[email protected]

 

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