The UK government has launched the first four competitions under a £100 million programme designed to help British artificial intelligence start-ups win public sector contracts and develop technology for major government departments.
Chancellor John Healey announced the Sovereign AI R&D Procurement Scheme on Monday during the G20 finance ministers and central bank governors meeting in North Carolina. The programme will fund companies developing demonstrator-stage AI systems for the NHS, Ministry of Defence, National Cyber Security Centre and Department for Business, Innovation, Science and Trade.
The initiative is part of the wider Sovereign AI programme, which aims to help British AI businesses establish themselves in the UK, expand domestically and compete in international markets. The government said the scheme would allow smaller companies to access opportunities that have traditionally been dominated by larger suppliers.
Healey said Britain was home to innovative AI companies and that the government wanted more of the technology’s economic benefits to reach communities across the country.
A key feature of the programme is its approach to procurement. Smaller businesses often struggle to win government contracts because they do not have the turnover, financial reserves or track record required by large public sector tenders.
Under the new scheme, companies may receive upfront payments where appropriate, giving them funding to build and test their technology. Successful firms will also retain ownership of the intellectual property they develop, allowing them to sell their products to customers in Britain and overseas.
The first NHS challenge will focus on AI systems capable of automating administrative tasks, coordinating care and supporting decisions across health services. The project is linked to the government’s 10 Year Health Plan.
Another competition will seek technology capable of reducing the cost and improving the efficiency of AI computing infrastructure. The Ministry of Defence is looking for secure ways to connect data with advanced AI systems across defence networks.
The fourth challenge, led by the National Cyber Security Centre, will support tools designed to help organisations identify and manage risks associated with increasingly capable AI agents.
AI Minister Kanishka Narayan said the government was using its purchasing power to give British founders an opportunity to turn promising ideas into products with real customers.
The programme targets technology that has moved beyond the research stage but has not yet been proven in operational environments. Government officials said becoming an early customer could help start-ups overcome one of the biggest obstacles in commercialising new technology.
Further competitions are expected as the programme expands.
The announcement comes alongside wider efforts to strengthen Britain’s domestic AI infrastructure. The government has also confirmed plans to open an AI Economics Institute and work with G7 countries on evidence about the technology’s economic impact.
Cloud provider Civo chief executive Mark Boost welcomed the programme but said the government should do more to support British technology companies and reduce dependence on overseas providers.
