UK government AI spending: what you need to know
Fresh data reveals how deeply the UK government is investing in artificial intelligence. Drawing on departmental disclosures and central initiatives, the numbers tell a clear story: AI is no longer a side project – it is a strategic priority. This surge in public spending mirrors the UK’s position as the world’s third largest AI market, valued at a staggering £73.3bn in 2024.
The data indicates that government AI contract expenditure has accelerated year on year. AI contracts by the Department for Science, Innovation and Technology are worth £1.5bn, which includes a Met Office contract with a tech giant to build a weather and climate forecasting supercomputer. Other contracts span healthcare, where AI helps junior doctors write discharge summaries, and defence, where it supports intelligence officers. The Department for Transport has also signed a significant £259 million AI contract for Transport for London. The Cabinet Office, the Ministry of Justice, and other departments also have contracts for AI related technologies.
Comment:
The UK government has access to large amounts of data, and wherever there are large amounts of data, there is potential for AI tools to be created. There is an incentive to develop AI tools where this can lead to efficiencies and cost savings for the tax. One example is using AI tools to make predictions based on existing UK government data sources, thereby replacing the census and making cost savings (since the census is expensive to implement).
Clients can gain valuable insights and transferrable skills by observing how the UK government deploys AI services. Clients can also learn from assessing their alignment with the public sector’s expectations regarding the procurement and compliance of AI technology, including the documentation of training data sources, bias and performance testing, human in the loop controls, and supplier transparency. Lastly, clients can also monitor developments in central guidance and any sector specific rules that may arise from increased public investment in AI safety and assurance.
