Reeves pledges £2.5bn for AI and quantum computing

The Chancellor, Rachel Reeves, has announced £2.5 billion of investment in artificial intelligence and quantum computing, in an effort to stop British technology companies and scientists moving abroad.

Reeves announced the package on 17 March, saying she wanted Britain to adopt AI faster than any other country in the G7.

What is in the package?

The package includes a £500 million Sovereign AI Fund, launching in April, to invest in British AI companies. A further £2 billion will be spent on a programme to buy quantum computers, giving British companies a guaranteed customer as they develop the technology.

The government says quantum computing could create 100,000 jobs in Britain.

The day before, the government announced £45 million for a new supercomputer called Sunrise, to be built at the UK Atomic Energy Authority's campus at Culham in Oxfordshire, part of an AI Growth Zone.

Drifting abroad

Reeves said too many promising British technology firms had been bought by overseas companies or had moved abroad to raise money. She wants to keep more of them in Britain as they grow.

Britain has strong universities and research in AI and quantum technology, but has often struggled to turn research into large companies. DeepMind, founded in London, was bought by Google in 2014.

What is quantum computing?

Quantum computers use the strange properties of quantum physics to carry out certain calculations far faster than ordinary computers. They could one day transform areas such as drug discovery, materials science, finance and cyber security, although practical machines are still at an early stage.

Britain has a number of quantum computing companies, including firms in Oxford, Cambridge and London.

The economic picture

The announcement is part of what Reeves calls three big choices for growth: backing innovation in AI and quantum technology, building closer ties with Europe, and giving more power to the regions.

It comes at a difficult time for the economy. The war with Iran has pushed up energy prices and mortgage rates, and growth has been weak.

Reaction

The sums are small compared with those being spent in the United States and China, and the real test will be whether the money helps British companies to grow.