Starmer’s AI plan confirms one thing: Britain is falling behind
Britain is falling further behind in the AI race – and the government’s new AI strategy confirms it, writes Alexandra Mousavizadeh
Prime Minister Keir Starmer laid out the British government’s new AI policy to much fanfare last week.
But look more closely, and the so-called AI Opportunities Action Plan is really a big missed opportunity. It’s five years too late, severely underfunded and woefully unserious about addressing the problems that caused Britain to fall behind in the first place.
You can see why many were upbeat about it. When market jitters, stagflation fears and doom-and-gloom abound here, it seems any growth-oriented plan is better than no growth plan.
But this is a missed opportunity not just for Britain’s AI sector. It’s one for its economy as a whole and for its role on the world stage.
Britain faces serious structural challenges around attracting and keeping the best talent in technology, creating a capital ecosystem to support innovation and reducing the high cost of energy. Starmer could have planted a flag for how to lead on AI. His plan barely acknowledged much less addressed these issues.
Seen through the lens of the global AI community – those on the frontier of the development of these technologies – the announcement has served only to confirm that Britain, having already fallen behind the US, China, even Canada and France, is set to fall further behind in the coming years.
Look to the US for AI innovation
Just look at the US: AI policy may not be neatly codified in Washington, but the country’s output – OpenAI, Anthropic and others – shows an innovation backbone driven by decades of research and development and funding neither emulated by Britain nor addressed by the provisions laid out in the new framework. And the early signs are that the new US administration intends to be front-footed and ambitious when it comes to AI.
Britain’s current AI shortcomings are present at every phase of the company development cycle. The AI talent that the UK retains still doesn’t have access to the massive amounts of risk capital available to US startups. Our convoluted investment landscape, one that limits access to government funding, is flanked by a waning national commitment to R&D. Few AI companies stay in the UK long enough to hit the public markets; those that do are greeted by a faltering London Stock Exchange that offers few incentives compared with other financial centres.
Another area where Britain is sorely lagging behind is on energy policy. Though this AI framework laudably seeks to build better energy infrastructure inside AI Growth Zones, when UK energy is triple the cost of the US and, closer to home, much more expensive than French energy, reducing planning requirements for data centes is highly unlikely to be an AI game-changer. Even if the tenants of the policy function as planned, the national grid appears woefully unprepared for demand that experts say would require the capacity of a large nuclear facility.
Considering other facets of the AI strategy, setting up a National Data Laboratory could have long-term research benefits, but targeting Summer 2025 for the first deliverables puts the UK well behind France, which has set up concrete systems to improve access to open data since 2018 and invested €2.5bn towards AI development as a part of the France 2030 plan.
UK AI plan is all ideas, no action
This kind of too-little, too-late approach is indicative of a broader issue: lack of implementation. While other countries are sharing specific AI use cases, the 50 recommendations included in the UK policy are still largely centred on exploring the impacts of AI policy changes rather than implementing it.
Look again to the US, where the government recently laid out more than 1,600 AI use cases in play across federal agencies – something it’s done since 2022. The UK has trailed in both adoption and transparency: In Autumn 2023, the government had just 74 AI use cases actively deployed.
The UK’s plan for sectoral AI Champions, who will “help identify” spots where AI “could be a solution,” may be a small step towards changing that, but the UK government’s talent push still trails the US, where more than 200 of the 500 planned public-sector AI hires were already in place as of last summer and agency appointments of Chief AI Officers are underway.
Had the UK government been serious about incentivising AI growth, critical questions around talent, energy and funding would have been front and centre of the new strategy. Britain badly needs to retain more of its best and brightest AI talent, to retain its leading AI companies beyond their early-stage funding rounds, to rebuild a culture of R&D and collaboration between academia, private and public sectors, and much more besides. Above all else, Britain requires serious AI investment to play catch up in a race against rivals that have been consistently outspending us for the past half-decade.
Having an AI strategy is certainly better than nothing, but unless these structural shortcomings are remedied, there’s no hope of Britain becoming an AI superpower. And with the flywheel effect of AI advancement already kicking in elsewhere in the world, we are running out of time to catch up.
Alexandra Mousavizadeh is co-founder and co-CEO of Evident Insights, an intelligence platform that benchmarks and tracks AI adoption across the financial services sector