UK adds £120 million to AI fund to invest in and buy from startups

On 24 October, the UK Treasury announced £120 million more for the Sovereign AI Fund, a government group that gives money to UK AI companies. Half will go into startups and half will go to a scheme that buys from them, in a £621 million package. The Fund is at this time £560 million, 12% more than at its launch in April.

How it works

In the scheme, firms make a first model. Government departments then test it in use. If it works, the firm keeps its rights. The scheme can pay money at the start, to help small firms with a small turnover. It is for health and AI security.

The numbers

The scheme increases to £160 million, from £100 million. AI security gets £415 million of the package. No results from the scheme are given.

What is not known

In the first half of 2026, European AI startups raised $23 billion, about 7% of the United States sum, by Crunchbase and HumanX data. The report tells that this money will not close that difference. It can change which UK startups get government customers first.

Insight: The government sits on several sides of the same deals

The UK invests in Basecamp Research and is its partner in a biosecurity lab. Anthropic gives model credits to that lab and also invests in Basecamp. The IMF found $300 billion of deals between large cloud firms and less strong AI firms in 3 years. This reads as a network of links in which the government is one more player, not a neutral buyer. Founders must check deals for the same names.