UK startups take centre stage in AI Action Plan

Prime minister Sir Keir Starmer has today signalled his strongest commitment to support AI startups so far, with the announcement of a new AI Opportunities Action Plan.

The full list of recommendations aims to use AI to ‘revolutionise’ the public sector and eradicate inefficiency. It includes the creation of new growth zones across UK regions.

In a press release, Science, Innovation and Technology minister Peter Kyle, said: “We want Britain to step up; to shape the AI revolution rather than wait to see how it shapes us.”

Also today, we published the 2025 Startups 100. The Index showcases plenty of fast-growing AI entrepreneurs, based in the UK, that could play an important role in the new strategy.

What is the AI Opportunities Action Plan?

Debate has raged over AI innovation versus regulation, as the rapid advancement of the technology and growing investor appetite for AI startups comes up against risk concerns.

In response to the conundrum, the government commissioned tech entrepreneur Matt Clifford to build a report into how the UK can build out its AI capabilities last July.

The findings have been packaged into a set of 50 recommendations which form the basis for the new AI Action Plan. Clifford, who is CEO of startup accelerator Entrepreneur First and previously helped to organise last year’s AI Safety Summit, will also lead the project.

Among the promises outlined in the new proposals, the government has pledged to:

• Invest in a new supercomputer to boost computing power and aid AI research and development (R&D)
• Increase the number of top AI research talents who work in the UK in order to tackle the digital skills shortage
• Build a series of AI-focused “growth zones”, starting in Culham, Oxfordshire, by accelerating planning approvals for data centres
• Streamline the AI procurement process to improve funding and support scale-up for successful pilots
• Utilise £14bn of investment in AI infrastructure, fundraised by large tech companies

Speaking to BBC News, the prime minister said AI “will drive incredible change” and “transform the lives of working people,” adding “Our plan will make Britain the world leader”.

Opportunities for startups

The AI Action Plan provides a welcome show of faith in the UK’s burgeoning AI startup scene. If implemented properly, it could also resolve hurdles currently faced by tech firms.

These include limited access to data centres and other resources, which the proposed new growth zones and planned supercomputer is intended to fix.

Working with large data volumes can also guzzle cash, which is why R&D is often an AI startup’s biggest expense. The government has said it will lean heavily on Innovate UK, part of  UK Research and Innovation, to bankroll promising new AI businesses.

Some problems will be harder to untangle. Digital talent shortages have resulted in a skills gap for AI startups, with many employers reporting that they are unable to find suitable hires.

In answer, the government says it will convince promising tech talent to relocate to the UK. To do so, restrictions to the visa process, made last year, will need to be undone. Provisional data shows that the UK has seen a huge drop in applications since the changes were made.

Commenting on the announcement, James Klein, Corporate partner at law firm Spencer West LLP, said: “it is imperative that we generate tangible future long-term growth for early-stage companies, as well as scale ups, at a time when there are many in the UK weighing up their options and looking to potentially take their businesses overseas”.

Top AI startups for 2025

Kyle said the plan will enable the UK to nurture AI startup talent. “At the moment, we don’t have any frontier conceptual, cutting-edge companies that are British-owned”, he reports.

We’d have to disagree with that statement. Our 2025 Startups 100 Index, published today, features numerous pioneering, AI-enabled startups that are poised to disrupt various public and private sectors, including the NHS. They include:

• Robin AI: our runner-up, a legal tech startup using AI to automate contract reviews
• MAGIC AI: an AI-powered fitness coach that lives in your bedroom mirror
• Userled: using generative AI to personalise B2B offers and content journeys
• Unify AI Ltd: a platform to connect developers with the best LLM for the job
• Mindgard: a a full-stack security solution to safely deploy and operate AI software
• Purple Transform: software that uses AI to detect danger in real time
• Lumi: an AI camera to track and record experiments in the lab
• Mach42: AI-enabled platform to cut the product design development cycle in half

After an explosive period of growth, this early generation of AI entrepreneurs is already answering the demand for innovative, first-class solutions.

If the AI Action Plan succeeds in delivering dedicated funding and R&D support, and can foster a thriving AI ecosystem, these startups can pay back what they gain by working to improve inefficiencies in the public sector and restart the UK’s growth trajectory.