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UK Government cancels £1.3 billion AI and tech funding amid economic tightening

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In a major policy shift, the UK government has cancelled £1.3bn in funding for research and development into artificial intelligence and technology, as part of wider efforts to stabilise the economy.

The funding, initially promised by the previous Conservative government, was intended to boost the UK’s position as a global leader in technology, but was cancelled by the Labour administration.

The Department for Science, Innovation and Technology confirmed the cuts, noting that the money had never been allocated in the budget despite being announced over the past 12 months. The withdrawn support included £800m for a supercomputer at the University of Edinburgh, set to be the most powerful in the UK, and £500m for AI research resources aimed at boosting computing power for AI projects.

A Department for Economic Development spokesperson explained the decision, saying: “The government is taking tough and necessary spending decisions across all departments in the face of billions of pounds of unfunded liabilities. This is essential to restore economic stability and deliver on our national growth mission.”

Industry experts have expressed concern that these cuts could hamper the UK’s technological progress at a critical time. Scott Lewis, senior vice president at Atacama, highlighted the importance of investing in AI: “Increasing investment in AI should be a top priority for government. Technological advances are fuelling the creation of data in all areas of everyday life, in business and academia, and this data can provide valuable insights to help solve challenges and drive innovation.”

The cancellation of the project has had a major impact on the University of Edinburgh, which has already invested £31 million in preparing for the supercomputer project. The planned supercomputer was expected to be 50 times faster than any current computing system in the UK, representing a major leap forward in the country’s computing capabilities.

Fraser Stewart, chief commercial officer at Lyfeguard, expressed his concerns: “The decision to cut funding for key technology and AI projects is a setback for the UK’s ambitions as a global tech superpower, and stifles the next innovations that could be key to business and economic growth. Restricting investment could limit the benefits to people and businesses in the future, so we hope this is not the start of a trend of technology funding cuts.”

Others in the industry echoed the sentiment. Libero Raspa, UK director of Adeso, pointed to the potential long-term consequences: “The cancellation of funding for major technology and AI projects is a major setback for the industry. The rapid rise of AI adoption requires significant investment, without which companies may struggle to innovate and fall behind their international peers. Technology, especially AI, must be central to driving efficiency, and investment is critical to successful technology projects that drive productivity and growth at the national level.”

As the UK faces these economic challenges, the decision to cut funding for such high-profile technology projects raises questions about the country’s future as a global leader in AI and technology. Industry leaders are urging the government to reconsider and work more closely with academia and industry to ensure the UK remains competitive in the rapidly evolving tech landscape.

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