The UK government has launched a venture fund for investing in domestic AI startups, part of a bid to minimize the country’s dependence on foreign-made technology.
The fund, Sovereign AI, will invest roughly $675 million in homegrown startups in fields ranging from model development, to agentic AI, to drug discovery. In addition, portfolio startups will gain access to the UK’s fleet of supercomputers, free visas for international hires, procurement opportunities, and advice from specialists within government.
Sovereign AI will be led by James Wise, a partner at VC firm Balterdon Capital, and Joséphine Kant, formerly of Dogwood Ventures and Y Combinator, an accelerator program whose funding helped establish OpenAI.
On Thursday, the fund announced an investment in Callosum, a startup developing software that helps different classes of processors to function effectively alongside one another. The fund has awarded a further six startups—Prima Mente, Cosine, Cursive, Doubleword, Twig Bio, and Odyssey—up to one million GPU hours worth of compute each on the UK’s supercomputer network. They will use that compute to train new models and run simulations.
“Sovereign AI is unlike anything Government has ever done before. Its unique approach will help break down the barriers that have too often held back British enterprise and innovation,” said Liz Kendall, the UK’s technology secretary, in a statement. “This is how we ensure Britain’s economic prosperity and national security in the modern age.”
The venture fund is one piece of the UK’s broader plan to use AI to spur economic growth, first outlined in January 2025. Under the plan, the government intends to “position the UK to be an AI maker, not an AI taker.”
Though the UK is home to prominent companies like Google DeepMind, ARM, and Wayve, critical segments of the AI production line—particularly semiconductor design and manufacturing, and model development—are dominated by rivals predominantly located in the United States and Asia.
By investing in domestic capabilities, the UK hopes to capture a larger portion of the hundreds of billions of dollars flowing into the AI sector, while minimizing a dependence on foreign technology that may become a liability in future negotiations with trading partners.
“We have been too gullible to the narrative that innovation is done in the US—that we lost the AI train and should not even think about it,” Rosaria Taddeo, a professor of digital ethics and defense technologies at the University of Oxford, told WIRED in January. “That’s a dangerous narrative.”
It is highly unlikely that the UK could become entirely self-sufficient in AI, experts say, particularly with respect to general-purpose model development, a field dominated by US-based OpenAI, Anthropic, and Google. An isolationist approach, they warn, would risk lumbering the country with inferior and more expensive AI products. Instead, Sovereign AI fund will focus on investing in domestic startups capable of commanding sections of the global AI supply chain.
“Even the US and China are going to be dependent on other folks,” says Keegan McBride, director of science and technology at the Tony Blair Institute, a think tank founded by the former UK prime minister. “The question is, if the world is irreversibly interdependent, how do you build the best possible position?”
The UK would be best served, claims McBride, by targeted investment in startups with a chance of becoming indispensable in a particular niche—say, specialized AI inference hardware or data center energy optimization—and those developing AI-based applications. “There’s a lot still up for grabs,” says McBride.
The sum available to Sovereign AI to invest is small in comparison to the hundreds of billions that the largest AI companies are spending on development. But as a co-investor alongside private VC firms, able to supply auxiliary benefits like access to compute, the new fund could become an invaluable partner to founders trying to bridge research concepts into viable businesses, says Tom Wilson, partner at London-based VC firm Seedcamp.
“It’s a massive opportunity for some of the defining companies of future generations to be started here,” says Wilson. “I don’t think [the new fund] will necessarily be the defining factor. But it’ll be a hugely beneficial piece, if invested in the best possible way.”
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