Sovereign AI Fund
The UK government's £500 million programme to back domestic AI companies, including a procurement scheme where winners keep their intellectual property.
Sovereign AI is the UK’s attempt to act like a venture investor with state money behind it, backing British AI companies so they start, scale and stay in the country rather than being bought or relocating. The headline figure is £500 million, released in tranches.
The first £100 million went to an R&D procurement scheme launched in August 2026, with opening competitions covering NHS productivity, compute efficiency, defence integration and AI agent security testing. Two design choices make it unusual: upfront payments, which let companies without cash reserves bid at all, and letting winners keep the intellectual property they create, so a government pilot turns into a sellable product rather than a dead end. Whether it works is an open question; the first contracts have not been awarded.