UK cancels £1.3 billion of tech and AI infrastructure projects

The U.K. government has canceled £1.3 billion ($1.7 billion) worth of computing infrastructure projects, in a big setback to the country’s ambitions to become a world leader in artificial intelligence.

A government spokesperson confirmed to CNBC that two major taxpayer-funded spending commitments, worth £500 million and £800 million, respectively, were being dropped in order to prioritize other fiscal plans.

The £500 million pledge, which was promised by former Prime Minister Rishi Sunak’s government last year, was meant to go to the AI Research Resource, a development initiative aimed at bolstering the U.K.’s compute infrastructure.

Meanwhile, the £800 million commitment, also announced last year, would have funded the creation of a next-generation exascale computer, capable of performing 1 trillion calculations a second, at the University of Edinburgh.

These initiatives would have boosted the U.K.’s ability to build high-performance infrastructure capable of running advanced AI models, which consume lots of power and require huge amounts of training data.

The newly elected Labour government said that neither of these pledges will be taken forward now.

“We are absolutely committed to building technology infrastructure that delivers growth and opportunity for people across the U.K.,” a spokesperson for the U.K.’s Department for Science, Innovation and Technology (DSIT), told CNBC via email.

The spokesperson added that the government is taking “difficult and necessary spending decisions across all departments in the face of billions of pounds of unfunded commitments.”

“This is essential to restore economic stability and deliver our national mission for growth,” the DSIT spokesperson said.

Last month, the government launched an AI Opportunities Action Plan. It said this plan would seek to identify how the U.K. can boost its computing infrastructure to better suit its needs and consider ways AI and other emerging technologies can best support Britain’s industrial strategy.

Earlier this week, British Finance Minister Rachel Reeves announced a raft of spending cuts after revealing Labour had inherited a projected £22 billion ($28 billion) of unfunded pledges from the center-right Conservatives.

Under Sunak’s administration, the government had made leading in AI a key priority, hosting a global AI safety summit at the famous Bletchley Park country house, which was formerly home to the World War II codebreakers who helped Britain defeat Nazi Germany.

Prime Minister Keir Starmer’s government is looking to bring in new statutory regulations for the AI industry, in contrast with his predecessor, who opted against issuing formal legislation for AI on the grounds that it would restrict innovation.

The Labour government was widely expected to announce the introduction of the first-ever U.K. AI Bill in a speech delivered by King Charles III last month. However, this didn’t happen. A DSIT spokesperson instead told CNBC the government would consult on plans to regulate AI in due course.