The British government has formally launched its flagship Sovereign AI Fund, a £500 million initiative designed to back the country's most promising artificial intelligence startups and ensure that the future of AI is built on British soil.
The fund was unveiled by Technology Secretary Liz Kendall at an event hosted by Wayve, the London-based self-driving car company now valued at $8.6 billion (£6.4 billion), at its King's Cross headquarters. Describing the initiative as "one of the most important things this government does to build a better future for our country", Kendall declared: "We are betting on Britain".
The Sovereign AI Fund is structured as a state-backed venture capital unit operating within the Department for Science, Innovation and Technology (DSIT). It combines financial investment with direct access to the UK's largest AI supercomputers, research and development support, and assistance navigating regulatory and procurement procedures. The unit is chaired by Balderton Capital partner James Wise, with Josephine Kant serving as Head of Ventures.
First wave of investments announced
The government confirmed that seven companies have received first-wave backing from the fund. The first direct equity investment has gone to Callosum, a London-based infrastructure startup whose technology enables different types of chip architectures to work together to train and operate AI models more efficiently. The government has taken an undisclosed shareholding in the company.
A second direct equity investment has also been made in an as-yet-unnamed business, with further announcements expected in the coming weeks.
Six additional startups have been granted fully funded access to the UK's AI Research Resource (AIRR) supercomputer network. Those companies are:
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Prima Mente, which is using AI to better understand brain diseases including Alzheimer's and Parkinson's
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Doubleword, focused on inference infrastructure to help businesses run and manage AI models inside their own systems
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Cosine, a frontier lab developing AI agents for defence and national security applications
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Cursive, a firm formed by Google DeepMind alumni developing autonomous AI agents
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Odyssey, which is developing "world models" — an approach where AI systems interact with convincing simulations of the real world
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Twig Bio, a biotechnology company
Several of these companies have signed "right of first refusal" agreements with the fund, granting Sovereign AI the initial option to invest in their future funding rounds.
Beyond funding: supercomputing, visas and regulatory support
The Sovereign AI Fund offers benefits that extend well beyond capital investment. Successful applicants receive fully funded access to the UK's largest AI supercomputers, including the Dawn supercomputer in Cambridge and Isambard-AI in Bristol. Up to one million GPU hours are available per company.
For companies seeking overseas talent, the fund provides expedited visa support with decisions delivered within one working day, alongside access to up to ten fully funded visas to bring leading international research and development staff into the UK.
Startups also receive hands-on support including guidance on accessing data, securing early procurement opportunities, independent product validation, and clearer routes through regulatory frameworks. Companies opting to become UK Limited Companies can have their legal fees covered by the unit.
'We must be an AI maker, not just an AI taker'
In her launch speech, Kendall set out the strategic rationale behind the fund. "AI is the most powerful technology of our lifetime, with the potential to transform every aspect of our lives," she said. "It is critical to our economic prosperity and non-negotiable for our national security. That is why we must be an AI maker, not just an AI taker".
The Technology Secretary emphasised that Sovereign AI represents a deliberate shift in government approach. "Sovereign AI is different from what's gone before," she said. "Because it will combine the speed of venture with the strength of the nation state". She added: "It will operate at the speed of VC, not the traditional pace of government. Because that is what this incredibly fast moving world demands".
The unit has been designed to be independent, with an investment committee making its own decisions "free from political interference about who to back and why".
Chancellor backs 'national AI champions'
Chancellor Rachel Reeves welcomed the launch, saying that by supporting national AI champions, the UK could ensure that internationally competitive companies can "start, scale and stay here in Britain".
The launch comes as the government seeks to put AI at the heart of its efforts to kickstart economic growth. Last month, Reeves told an audience in the City of London that the UK would pursue "the fastest adoption of AI in the G7", arguing that a thriving AI industry was "a critical part of our national resilience".
The Sovereign AI Fund sits within a broader £2.5 billion package spanning AI and quantum computing, and forms part of the government's AI Opportunities Action Plan.
Industry reaction
Alex Kendall, CEO of Wayve, welcomed the initiative. "We're excited to see the next generation of British AI companies benefit from the funding opportunities available and join us in supporting the UK's expanding AI ecosystem," he said.
Danyal Akarca, co-founder of Callosum, said the UK was the "natural place" to build his company due to its strong university talent and private AI labs like DeepMind.
Chancellor's Entrepreneurship Advisor Alex DePledge added: "We don't have a talent problem in the UK — we have a scale problem. The next wave of AI winners will come from countries that don't just invent, but back their builders end-to-end. Sovereign AI is a shift in that direction: combining capital, compute and customers to give British founders a genuine platform to build globally competitive companies from day one".
Context and ambition
The launch of the Sovereign AI Fund comes just one week after OpenAI shelved plans to invest in a major data centre in the UK, citing high energy costs and regulatory burdens. The government's move signals a determination to assert British sovereignty in AI development at a time when the global AI race is intensifying.
According to the Department for Science, Innovation and Technology, discussions are continuing with around thirty additional companies about access to supercomputing infrastructure. The government, through the Sovereign AI Fund and the Global Talent Taskforce, also plans outreach across UK cities to extend the benefits of AI technology nationally.
Kendall's message to British founders was unequivocal: "We will ensure you never have to choose between your ambition and your home, because Britain will give you both".