Comment: How the UK can be a global AI leader

The UK government’s new AI Opportunities Action Plan is a huge step in the right direction, both towards “Building sufficient, secure and sustainable AI Infrastructure” and “securing our future with homegrown AI”. Crucially, the Plan starts by acknowledging that “countries that enable the build out of AI infrastructure will reap benefits through increased economic growth, the reinvigoration of former industrial sites and ownership of critical strategic assets”.

The UK must own more of the tech stack

It’s encouraging to see the UK government calling out the need for better AI infrastructure. However, to accrue the greatest benefits from AI in the long-term and to ensure it remains a world leader in the sector, it is essential that the UK own and develop more of the overall tech stack itself.

For example, the government's announcement of £14bn in data centre investments is undoubtedly a positive move, especially for the teams and organisations conducting world-leading AI research and implementation in the UK. Yet, as things stand, these data centres would largely rely on US-derived technology from companies like NVIDIA, the primary beneficiary of the AI boom in recent years, still enjoying a 75 per cent gross profit margin. While we need to rely on established technologies to build data centres right now, failing to also invest in not just buying but creating the next generation of hardware will limit the UK's future ability to innovate and compete on a global scale in the long term.

AI security depends on domestic hardware

This is also crucial to the security dimension of AI. The government’s aims for UK compute are the right level of ambition to keep the UK playing as a serious contender, including with a significant proportion in public hands. But to be secure, the UK needs to move beyond just buying enough chips to run that level of compute: we need to have UK hardware as an indispensable link in the chain.

Strategic interventions are key

The UK punches above its weight, at third place in global AI league tables, but countries like France are hot on our heels, with President Macron announcing €109bn in new partnerships in France at the recent AI Action Summit in Paris. This is the sort of bold intervention we need from the UK government: as a mid-sized country, we shouldn’t be aiming to do everything, but strategic moves can establish generational leadership in the right technologies to play to the UK’s strengths.  

AI inference chips: a crucial opportunity

A recent report from UK Day One, who worked closely with Matt Clifford (the author of the AI Opportunities Action Plan), highlighted AI inference chips as one area where the UK has the leverage to build best-in-class capability, given the lack of clear leaders in the area to date and the bottomless demand as the AI world turns to inference-time compute scaling for the next wave of performance improvements. This is the same conclusion I came to while working with early foundation models during my PhD, which spurred me to found Fractile. Access to cheaper, faster hardware on which to deploy our leading AI models is going to become the largest moat in frontier AI.

Homegrown innovation will drive long-term success

Establishing a series of UK market leaders that can dominate key technology niches like AI inference would have multiplicative benefits across UK infrastructure and AI rollout, bringing gains to the country’s lagging employee productivity as well as boosting UK deep technology development.

Underpinning the UK’s long-term compute aspirations with homegrown innovative hardware will play to the UK’s strengths. The UK is home to a pool of world-class talent, and over 160 chip design companies and 21 manufacturers, employing 15,000 skilled people, with hubs in Cambridge, Bristol and Oxford having already produced world-leading semiconductor companies like ARM and attracted significant investment from global tech giants – a government priority highlighted by the promising new “Oxbridge Arc” development project, with plans to develop ‘Europe’s Silicon Valley’ there.

Owning the AI tech stack is a strategic necessity

Owning more of its tech stack, such as developing the underlying hardware that powers AI systems, is imperative for the UK to “shape the AI revolution” for the long-term. This approach also aligns with the government's broader goals for national technological sovereignty and economic growth. Owning more of the AI tech stack would lead to a more resilient and independent AI ecosystem in the UK, less vulnerability to global supply chain disruptions and geopolitical tensions, and create skilled jobs and attract investment - a key objective of the government.

The next six months are critical

By combining the aspirations outlined in the AI Action Plan with a strategic focus on developing and owning critical AI infrastructure components, particularly in areas like AI inference chips, the UK can provide tangible benefits for its citizens while securing a competitive advantage in the global AI landscape. The next six months will be vital and my colleagues and I at Fractile look forward to working closely with the government as its long-term AI infrastructure plan is drawn up.

Dr. Walter Goodwin, CEO and founder of Fractile