UK unveils AI package with £100m AI Biosecurity Lab and £60m more for its Sovereign AI Fund
Ahead of next week's Budget, the Chancellor has set out spending on AI security, homegrown AI companies and local adoption. The AI Biosecurity Lab also gets up to £200m in model credits from OpenAI and Anthropic.
The UK government has set out a package of AI investments that the Chancellor will make part of next week's Budget, HM Treasury announced on 24 October 2026. The centrepiece is a £165 million National AI Biosecurity Initiative, including £100 million for a new AI Biosecurity Lab (AIBL), alongside an extra £120 million for the AI Security Institute and an additional £60 million for the Sovereign AI Fund, which invests directly in UK AI companies.
The BBC reports that the measures form part of Wednesday's Budget. The government did not give a single total for the package; industry body techUK described it as "a strong £600m+ package".
A new institution for AI and biosecurity
According to the Cabinet Office, the AI Biosecurity Lab will operate as an independent, non-profit organisation, built on a similar model to the AI Security Institute. The government calls it the world's first dedicated AI biosecurity organisation, a claim that comes from the government itself.
Its initial work will focus on two things: detecting emerging biological threats earlier, and speeding up the development of vaccines, treatments and other medical countermeasures. It sits inside a wider National AI Biosecurity Initiative that brings together the UK Health Security Agency, the Animal and Plant Health Agency and the Defence Science and Technology Laboratory. The lab will also work with the Medicines and Healthcare products Regulatory Agency to prepare for health emergencies and inform the regulation of AI-designed medicines.
Beyond the £100 million for the lab, the initiative includes £65 million to strengthen bio surveillance and develop medical countermeasures for priority pathogens.
Commitments from AI companies
Two US frontier AI developers are backing the lab with up to £200 million in commitments, according to the Cabinet Office. OpenAI will provide £100 million in compute and model credits and access to its most capable relevant models through its Rosalind Biodefense programme. Anthropic will provide up to £100 million in model credits, trusted model access and technical support. These are in-kind credits to spend on the companies' own models, not cash.
Google DeepMind will partner on research and look to provide trusted access to its Gemini and specialised science models. London-based Basecamp Research, which builds AI models for biology, will give the lab access to its models and expertise. "Basecamp Research is proud to support the AI Biosecurity Lab," co-founder Oliver Vince said in the government's announcement.
Cyber defence and AI security
The package adds £120 million for the AI Security Institute, which tests advanced AI models and develops technical standards. It also includes £60 million for a National Cyber Shield that will use agentic AI to improve the UK's cyber defences. That figure contains a £25 million challenge fund for UK AI and cyber security innovators and scoping work for a regulatory sandbox for agentic cyber security tools in critical national infrastructure, the public sector and industry.
A further £70 million goes to a new National Exposure and Real-Time Vulnerability (NERV) Centre, which will use AI tools to find cyber vulnerabilities across critical infrastructure. The BBC links the timing to this week's "php2shell" flaws in the PHP programming language, after which the UK government said it had taken some sites offline as a precaution.
Money for homegrown AI companies
For founders, the most direct measures are in the section on homegrown capability. The Sovereign AI Fund gets an additional £60 million to invest directly in promising UK AI companies, and adds a new focus on Physical and Industrial AI, covering areas such as robotics, autonomous systems and advanced manufacturing. Another £60 million goes to Sovereign AI's R&D Procurement Scheme, which buys innovative solutions for health and care and for AI security, assurance and safe adoption.
On hardware, £18 million will support a new UK Advanced Chip Design Academy to build chip-design skills; the government links new chip design capability to Edinburgh. AI Minister Kanishka Narayan said: "We cannot afford to rely entirely on technology built overseas."
Adoption, jobs and skills
The package also includes a £15 million AI Challenge Prize, with the first award aimed at firms using AI to solve health problems; an extra £23 million over three years for the AI Economics Institute; £10 million a year to study how AI will reshape jobs; £30 million for local AI partnerships with Mayoral Strategic Authorities that include support for SMEs; and a new National Cyber Security Centre AI Cyber Security Centre of Excellence in Manchester.
"AI will transform daily life: every firm, community, hospital, school, and every aspect of our economy can benefit," Chancellor John Healey said, describing "a distinctively British approach to AI".
What it means for European founders and investors
For UK AI startups, the extra Sovereign AI money and the procurement scheme are the parts that can turn into contracts and cheques. The new Physical and Industrial AI focus is relevant to robotics and industrial AI companies, a field where European investors have been active, as with Zurich's Enact Intelligence and Düsseldorf's Ubitium.
The security spending, from the NERV Centre to the Cyber Shield challenge fund, points to more public demand for AI-driven cyber defence. It follows NVIDIA's commitment to fund UK agentic safety and security research. Many of the amounts are modest next to private rounds, and detailed rules for the funds have not yet been published. Founders should watch the Budget documents on Wednesday for timing and eligibility.
Spotted an error? Email contact@europreneursmedia.com and we'll correct it. See our corrections policy and editorial standards.
