Jeremy Hunt needs more than AI optimism to make Britain the “next Silicon Valley”

UK chancellor Jeremy Hunt enters Downing Street after delivering the Spring Budget in which he outlined new investment in AI initiatives across the UK
(Image credit: Getty Images)

The UK government was noticeably light on details when it came to AI in the 2024 Spring Budget, with industry stakeholders left wondering exactly what its vision for the technology is.

Chancellor Jeremy Hunt delivered his budget in the Commons with the usual assertion of economic optimism in the face of “a financial crisis, a pandemic, and an energy shock caused by war in Europe”.

There was some explanation for optimism, though - the UK’s burgeoning tech sector, which Hunt taps, at least in part, as a clear path towards growth and employment. 

He described the UK tech sector as one of “our most innovative industries” and, consequently, one of the “most powerful ways to attract investment”.

“Outside the US we have the most respected universities, the biggest financial services sector, and the largest tech ecosystem in Europe,” Hunt said. “We have double the AI startups of anywhere else in Europe. Double the venture capital investment.”

Hunt also touted a UK tech economy twice the size of Germany and three times larger than France, heralding the UK’s future as the “next Silicon Valley.”

The chancellor didn’t elaborate much further on the government’s grand ambitions for the country’s tech sector, however.

Aside from a handful of sporadic references in the written budget and a few announcements on research funding in a subsequent statement, the treasury offers no clear roadmap towards realizing the “Silicon Valley” dream.

The wording of the budget is particularly vague at times, with its assertion of financial commitment to “public sector research and innovation infrastructure.” It details that £14 million will be channeled into developing the “next generation of health and security technologies.”

There’s more to go off when it comes to AI, as the budget breaks down the costs of introducing AI into the public sector, delineating around $3.4 billion for the NHS’s “digital transformation.”

This transformation will include, among other things, new AI tools to cut form-filling times and aid doctors in reading MRI scans. Other public funding announced in the budget also slated AI for use in Parliament as part of an overall “Public Sector Productivity Plan.”

Experts suggested the plans lack a clear plan for investment in the infrastructure vital to Ai development across the country. The UK needs to focus on supporting its framework of enterprises and infrastructure if it's going to make any serious headway as a tech superpower.

Michal Szymczak, Head of AI Strategy at tech consultancy Zartis, echoed these sentiments in a statement to ITPro, suggesting the apparent limitations of the budget.

“While today’s UK Spring Budget Statement has paid lip service to AI playing a part of investments across healthcare and public sector, it’s disappointing we didn’t hear more specifics,” Szymczak said.

“Considering we’re dealing with a technology here that is poised to change the world, it feels like an oversight for the UK government not to address it more thoroughly,” he added.

The budget did commit to increasing the size of the UK’s AI incubator team, designed to ensure the “UK government has the in-house expertise” on AI, as well as to some weighty investment in the Alan Turing Institute (ATI).

But from an industry standpoint, the budget isn’t clear enough in strengthening its practical commitment to the AI industry in the UK.

The UK can’t just have an AI vision, it needs a roadmap 

If the UK is going to thrive as a global technology powerhouse, it needs to invest in the necessary infrastructure to support this, according to Allan Kaye, co-founder and managing director at Vesper Technologies. Kaye suggested that Hunt’s budget lacks practicality. 

“From the announcement today, it’s clear that renewed focus on innovation is on the horizon for the UK government. Across the past year, investment into AI capabilities has accelerated, and it’s good to see these developments reflected in the budget,” Kaye said.

“But this alone is not enough. If we want the UK to become the next AI superpower, or as Hunt put it “the world’s next Silicon Valley”, we need to see investment in the infrastructure required to support AI growth,” he added.

Such infrastructure would include, Kaye said, the newest GPU architectures and a network of data centers “suitably equipped” to handle the huge volumes of power and heat associated with AI.

What the UK government shouldn’t get bogged down with is program upon program of research or skills training. While these are vital to preparing the UK for AI and training the next generation of AI workers, they represent distractions from more important investments in infrastructure.

Recently, for example, it announced its tech skills “bootcamps” program designed to promote jobs in tech with the promise of a “comfy” pay packet at the end.

There has been some activity from the Conservatives on more practical projects, though. In December, it announced plans to begin classifying data centers as critical infrastructure, and data center projects in general have been gathering some traction, with one recently announced in east London and another slated for Yorkshire by Microsoft.

But this movement isn’t quick enough. The government just had the perfect opportunity to announce more concrete funding plans in the form of a budget and it didn’t.

“It’s no longer enough to use AI models and demonstrate the public sector is thinking innovatively - we need to see steps taken to make this a long-term strategy aimed at putting the UK ahead and incubating startups,” Kaye said.

George Fitzmaurice
Staff Writer

George Fitzmaurice is a staff writer at ITPro, ChannelPro, and CloudPro, with a particular interest in AI regulation, data legislation, and market development. After graduating from the University of Oxford with a degree in English Language and Literature, he undertook an internship at the New Statesman before starting at ITPro. Outside of the office, George is both an aspiring musician and an avid reader.