UK AI plans fall short without backing home firms, warns UKAI
The UK’s ‘sovereign AI’ push risks becoming a missed opportunity unless government policy does more to back UK businesses at home, according to the head of Britain’s AI trade body.
Speaking after a parliamentary roundtable in the House of Lords, Tim Flagg, UKAI boss, said the debate around sovereign AI should focus on growth and scale for British firms.
He argued that while the UK doesn’t need to build everything domestically, we should focus on ensuring British AI firms are not locked out of public sector procurement instead, or indeed crowded by overseas giants.
“The commercial question is simple”, he said. “Are UK businesses getting real routes to revenue, reference customers and scale, or are we importing capability by default and weakening our own market in the process?”
Gap between ambition and delivery
The roundtable, which included policymakers and industry members, broadly agreed that sovereignty should be defined by control and resilience, rather than complete self-sufficiency.
In practice, that means making sure that critical AI systems and tech services are somewhat shielded from geopolitical headwinds or supplier decisions.
Elsewhere, it also means working with global partners where it makes commercial sense.
However, several attendees warned that current procurement practices are often skewed toward bigger foreign vendors, which limits opportunities for UK companies to scale.
“There’s a gap between ambition and delivery”, Flagg said. “If UK companies can’t win meaningful contracts at home, they won’t build the scale needed to compete internationally.”
His words come as ministers push to position the country as a global AI hub, with new, sweeping investments in compute and a sovereign AI unit.
A year ago, Keir Starmer, with the help of Matt Clifford, promised to “mainline AI into the veins” of the UK’s economy.
The so-called AI Opportunities Action Plan, a 50-point blueprint unveiled in January 2025, was meant to turn that rhetoric into results, placing the UK on equal footings with the likes of China or the US, as a global AI superpower.
New data from the Startup Coalition’s AI index shows the UK’s top AI firms have raised over £20bn in private capital, commanding a cumulative valuation north of £45bn.
Raj Abrol, chief executive of Galytix, said: “Home-grown AI is also crucial for turbocharging the country’s economy, creating jobs and opportunities for businesses to thrive by harnessing agentic AI capabilities to compete with larger global players.”
But other European countries like France have lent heavily into state co-investment, using public capital to de-risk scale-up technologies domestically.
Britain’s approach has relied instead on market momentum, a gamble that private confidence alone will do the heavy lifting.
The gap shows up early, with university spin-outs, a traditional strength of UK innovation, still giving away an average equity stake of 16.1 per cent to their parent institutions.