The UK government has unveiled a £100 million ($130 million) initiative aimed at accelerating the growth of its artificial intelligence sector by investing in domestic AI hardware innovation. The plan will provide guaranteed payments to British startups developing cutting-edge AI chips and computing infrastructure, helping them secure funding and scale operations without relying solely on private investment. The program is designed to strengthen the UK’s position in the global AI supply chain by reducing dependence on foreign technology, particularly from the United States and Asia. By offering financial assurances to startups, the government aims to lower the risks associated with developing complex hardware, which often requires significant upfront capital and long development cycles. Under the scheme, qualifying startups will receive upfront payments tied to milestones in hardware development, including prototype completion, testing, and manufacturing readiness. These payments are guaranteed regardless of whether the final product achieves commercial success, giving innovators greater confidence to pursue ambitious projects. The initiative is part of a broader strategy to boost the UK’s AI ecosystem, which has seen rapid growth but remains vulnerable to talent drain and limited access to capital compared to larger tech hubs. The government has also pledged to streamline regulatory pathways for AI startups and expand partnerships between universities, research labs, and industry. Officials argue that investing in AI hardware is essential for national security, economic resilience, and technological sovereignty. As AI becomes increasingly embedded in critical sectors—from healthcare and defense to transportation and finance—the ability to produce trusted, homegrown AI infrastructure is seen as a strategic imperative. The funding announcement follows growing concerns about the dominance of foreign semiconductor firms and the geopolitical risks tied to reliance on global supply chains. By backing homegrown innovation, the UK aims to foster a more self-sufficient and competitive AI economy. The government expects the program to support hundreds of startups over the next five years and catalyze private sector investment in the space. It will be administered through a new public-private partnership, with oversight from the Department for Science, Innovation and Technology.