In a significant policy shift, the UK government has cancelled £1.3 billion in funding earmarked for artificial intelligence (AI) and technology research and development, as part of broader efforts to stabilise the economy.

The funding, initially promised by the previous Conservative government, was intended to bolster the UK’s position as a global tech leader but has been axed by the Labour administration.

The Department for Science, Innovation and Technology (DSIT) confirmed the cuts, stating that the funds had never been allocated in the budget despite being announced within the last 12 months. The withdrawn support included £800 million for an exascale supercomputer at Edinburgh University, poised to be the most powerful in the UK, and £500 million for the AI Research Resource aimed at enhancing computing capabilities for AI projects.

A DSIT spokesperson explained the decision: “The government is taking difficult and necessary spending decisions across all departments in the face of billions of pounds of underfunded commitments. This is essential to restore economic stability and deliver our national mission for growth.”

Industry experts have expressed concern that these cuts could hinder the UK’s technological progress at a critical time. Scott Lewis, Senior Vice President at Ataccama, highlighted the importance of AI investment: “Boosting AI investment should be a top priority for government. Technology advancement is fuelling data creation in all areas of everyday life, in business and academia, and that data can provide valuable insights to help solve challenges and drive innovation.”

The cancellation has been particularly impactful for Edinburgh University, which had already invested £31 million to prepare for the supercomputer project. The planned exascale supercomputer was expected to be 50 times faster than any current computing system in the UK, representing a significant leap forward in the nation’s computational capabilities.

Fraser Stewart, Chief Commercial Officer for Lyfeguard, voiced his concerns: “The decision to cancel funding for key tech and AI projects is a setback for the UK’s global technology superpower ambitions, stifling the next innovations that could have been key to business and economic growth. Restricting investment may limit the benefits to people and businesses moving forward, so hopefully, this is not the start of a trend of tech funding cuts.”

Others in the industry echoed these sentiments. Libero Raspa, Director of adesso UK, noted the potential long-term consequences: “The cancellation of funding for key tech and AI projects is a significant setback for the industry. The rapid rise of AI adoption requires substantial investment and without this, companies may struggle to innovate and fall behind international counterparts. Technology, particularly AI, should be central to enhancing efficiency, and investment is crucial for successful tech projects that boost productivity and growth nationwide.”

As the UK navigates these economic challenges, the decision to cut funding for such high-profile tech projects raises questions about the country’s future as a global leader in AI and technology. Industry leaders are urging the government to reconsider and to collaborate more closely with academia and industry to ensure the UK remains competitive in the rapidly evolving tech landscape.