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Labour shelves £1.3bn Tory-pledged AI compute projects

Compute funding
The scrapped plans include an £800m supercomputer in the University of Edinburgh. Image credit: Wirestock Creators / Shutterstock

The government has scrapped £1.3bn of funding for AI and compute projects pledged by the Conservatives as Labour reassesses the budget left by Rishi Sunak’s administration.

The projects included an £800m exascale supercomputer in Edinburgh that the previous government said would accelerate AI, medicine and low-carbon energy advancements.

The supercomputer was announced last October by the former tech secretary Michelle Donelan.

Labour has also scrapped the £500m promised by the Conservatives for AI Research Resource, according to reports from the BBC.

The Department for Science, Innovation and Technology (DSIT) said the pledges made by the previous government were not allocated in its budget.

“The government is taking difficult and necessary spending decisions across all departments in the face of billions of pounds of unfunded commitments,” said a DSIT spokesperson.

“This is essential to restore economic stability and deliver our national mission for growth.”

AI Resource Research has already received £300m in government funding.

A spokesperson for the University of Edinburgh said: “The University of Edinburgh has led the way in supercomputing within the UK for decades, and is ready to work with the government to support the next phase of this technology in the UK, in order to unlock its benefits for industry, public services and society.”

The university confirmed to UKTN that £31m had already been spent on the facilities where the supercomputer was planned to be housed.

The scrapped funding comes as the Labour-run Treasury comes to terms with the financial situation left by the Conservatives. The Tories claimed that DSIT had underspent its budget.

This week, Chancellor Rachel Reeves, addressing parliament, said the predecessors left the government with a £22bn “black hole” in the budget made of unfunded spending plans.

Reeves claimed Labour was unaware of the scale of the UK’s financial problems before taking office. The government has cancelled several costly plans announced by the Conservatives including hospital renovations and railway projects.

UKTN has contacted Edinburgh Council for comment.

Representatives from the tech sector described the move as a “setback”.

“The cancellation of funding for key tech and AI projects is a significant setback for the industry,” said Libero Raspa, director of IT business Adesso UK. “The rapid rise of AI adoption requires substantial investment and without this, companies may struggle to innovate and fall behind international counterparts. Technology, particularly AI, should be central to enhancing efficiency, and investment is crucial for successful tech projects that boost productivity and growth nationwide.”

Fraser Stewart, chief commercial officer at software company Lyfeguard, added: “Restricting investment may limit the benefits to people and businesses moving forward so hopefully this is not the start of a trend of tech funding cuts.”

Dominic Vergine, founder and CEO at AI and deeptech startup Monumo, said that while the government had to make “difficult decisions to strengthen the economy”, he feared cuts to computing will be seen as “very short-term thinking”.

He added: “It also fails to recognise the truly world-class institutions that we have in the UK and the advantage that they can give the country. With the appropriate government funding, we could become truly competitive globally, but it’s cuts such as these that will hold the UK back.”

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