Government Publishes £1 billion AI Sector Deal

The Department for Business, Energy and Industrial Strategy and the Department for Digital, Culture, Media and Sport have published the artificial intelligence (AI) sector deal as part of the national Industrial Strategy [1]. The sector deal, worth over £1 billion, is the collaborative work of the Government and industry. It has the support of fifty leading technology companies at the forefront of innovation in artificial intelligence. It also comes with nearly £300 million of private investment.AI and data were listed in the Industrial Strategy white paper as one of the four ‘Grand Challenges’ – areas in which the UK can lead the world for years to come. To achieve this, the policy paper sets out an ambitious commitment to work with the private sector to boost research and development (R&D) spending to 2.4% by 2027, and 3% over the longer term. Education is a key component of the AI sector deal. At a higher education level, the sector deal announced that one-thousand PhDs related to AI would be funded by 2025. Further funding will also go towards training eight thousand specialist computer science teachers for secondary schools. The deal will ‘make sure every secondary school has a fully qualified computer science GCSE teacher to give the next generation the skills they need to develop and capitalise on future technology’ [2]. The policy paper also has announced regional ‘Tech Hubs’. For instance, £21 million has been allocated to the startup promotion body Tech Nation in order to support their work developing more UK based startups across the nation. Gerard Grech, the CEO Tech Nation, said: ‘Tech Nation cannot wait to get started on shaping its first programme for the UK’s fastest-growing AI companies next year, which will help those who have proven their potential to reach the next level.’ [3] The UK will also develop the world’s first centre for Data Ethics, to ensure that all British AI development is held to the highest ethical standards. Expanding and developing infrastructure is also a key component of the policy paper. The UK government will invest over £1 billion in infrastructure to support AI development, from ‘5G networks to full-fibre broadband’. They will also explore ‘data sharing frameworks such as Data Trusts – mechanisms where parties have defined rights and responsibilities with respect to shared data – in order to protect sensitive data, facilitate access to data, and ensure accountability’ [4].

Growing the AI industry in the UK

The policy paper responds to the recommendations of the October 2017 AI Review, ‘Growing the AI Industry in the UK’ [5], led by Professor Dame Wendy Hall, the Regius Professor of Computer Science, University of Southampton, and Jérôme Pesenti, the CEO of BenevelentTech. The review stressed how government and industry should work together on skills and infrastructure and must share the ultimate aim to implement a long-term strategy for AI in the UK. Business Secretary Greg Clark said of the deal: ‘Artificial intelligence provides limitless opportunities to develop new, efficient and accessible products and services which transform the way we live and work. Today’s new deal with industry will ensure we have the right investment, infrastructure and highly-skilled workforce to establish the UK as a driving force in the development and commercial use of artificial intelligence technologies.’

The Sector Deal Has Been Welcomed By the Industry

Antony Walker, deputy CEO of TechUK, said: ‘The Government’s AI Sector Deal provides a clear blueprint for how the UK can become a world-leader in innovative, responsible and ethical AI. The sector deal focuses on the key issues of maintaining leadership and driving uptake, building the skills pipeline and ethics. Success will depend upon AI companies being deeply engaged in the process.’[6] Hugh Milward, Senior Director, Corporate External and Legal Affairs, Microsoft UK, said: ‘The UK is poised to do great things in the field of AI. If the Sector Deal can ensure that the development of AI is ethical, inclusive and responsible then the UK, as the home of the father of AI Alan Turing, will have a bright future as a world-leading centre for AI’.

Analysis: Responsible Development of an Essential Industry

The sector deal shows that the government fully understands the importance of a considered, targeted approach to growing the industry in the UK. There is much to gain: PWC estimates that as much as ten per cent could be added to the UK’s GDP by 2030. The Bank of America suggests a productivity boost of up to thirty per cent is possible. The economic benefits are an obvious motivation for the sector deal. In addition to the economic benefits, the sector deal doesn’t lose sight of the potential AI has to improve people’s lives. It is extremely encouraging that the sector deal is supporting innovation in areas such as ‘Next-Generation Services’ and ‘Early Diagnostics and Precision Medicine’.The prominence of the ‘UK Centre for Data Ethics and Innovation’ within the sector deal is a positive sign that the government also understands that this is one industry that needs to be developed with care. The sector deal acknowledges that innovators must consider their ethical and social responsibilities. Is the personal data collection needed to run a new AI development a fair infringement on citizens’ lives? Will this new technology be used to improve people’s lives? By establishing a centre for data ethics and innovation, the government, as a key financial backer of the industry, is showing they take their social responsibility seriously.

Key Commitments of the AI Sector Deal:

▪ £20 million in the application of AI in the services sector through the Next Generation Services Industrial Strategy Challenge ▪ £93 million from the Industrial Strategy Challenge Fund into the robotics and AI in extreme environments programme ▪ £20 million GovTech Fund which will support tech businesses to provide the government with innovative solutions for more efficient public services ▪ Raise overall UK R&D intensity by raising total R&D spending across public and private sectors to 2.4% by 2027, and 3% over the longer-term ▪ £406 million in skills, with a focus on maths, digital, and technical education, including funding to upskill up to 8,000 computer science teachers and creating a National Centre for Computing ▪ Doubled Tier 1 (Exceptional Talent) visas to 2,000 a year to attract the best and brightest talent in science, digital technology (including specialists in AI), engineering, arts and creative sectors ▪ A new Office for Artificial Intelligence to work with the AI Council to create and deliver the AI strategy ▪ £2.5 billion Investment Fund incubated in the British Business Bank ▪ Establishing a UK Centre for Data Ethics and Innovation 


[1] Department for Business, Energy & Industrial Strategy, AI Sector Deal, 26 April 2018, link [2] Office of the Secretary of State for Wales, Tech sector backs British AI industry with multi-million-pound investment, 26 April 2018, link [3] ibid. [4] Department for Business, Energy & Industrial Strategy, AI Sector Deal, 26 April 2018, link [5] Department for Digital, Culture, Media & Sport, ‘Growing the artificial intelligence industry in the UK’, 15 October 2017, link [6] TechUK, UK Government AI Sector Deal – A blueprint for making the UK AI ready, 25 April 2018, link [2] Office of the Secretary of State for Wales, Tech sector backs British AI industry with multi million-pound investment, 26 April 2018, link [3] ibid. [4] Department for Business, Energy & Industrial Strategy, AI Sector Deal, 26 April 2018, link [5] Department for Digital, Culture, Media & Sport, ‘Growing the artificial intelligence industry in the UK’, 15 October 2017, link [6] TechUK, UK Government AI Sector Deal – A blueprint for making the UK AI ready, 25 April 2018, link

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