UK Budget puts more than £700m into AI, including more for the AI Security Institute

HM Treasury’s Budget 2026 document, published on 28 October, says the government “has invested over £700 million” in AI at this Budget, across security and resilience, adoption, a new Data Centre Covenant and British AI hardware. Most of the headline items had been set out four days earlier by Chancellor John Healey, alongside the AI Biosecurity Lab; the Budget text confirms them and adds detail.

Security is the largest block, which the document puts at “around £500 million”. It includes an additional £120 million for the AI Security Institute, a new AI Cyber Security Centre of Excellence in Manchester, £70 million for a National Exposure and Real-Time Vulnerability (NERV) Centre at the National Cyber Security Centre, and £60 million for the first phase of a national Cyber Shield. It also names £40 million for a National Agentic Security Unit to “detect, investigate and respond to cases of rogue agentic systems”. The National AI Biosecurity Initiative comprises £100 million for the lab, £50.5 million for bio-surveillance and £14.5 million for medical countermeasures; the lab is to be supported by up to £200 million in model credits from OpenAI and Anthropic, which are credits rather than cash. Adding the itemised lines in the security section gives about £479 million, below the stated figure, and the passage does not say what accounts for the difference.

On adoption, the Budget confirms £30 million for local AI pilots in three Yorkshire combined authorities, a £60 million AI Pathfinder Fund, an extra £60 million for the Sovereign AI Fund from 2027-28 and an extra £23 million for the AI Economics Institute.

The Covenant is given no figure of its own in the AI section. The Data Centre Covenant sets tests on national security, energy-system costs, community benefit, environmental standards and UK jobs. All data centres are “encouraged” to meet them, and those seeking enhanced government support are required to. In return the government promises a Ministerial Control Centre to speed up grid connection and the reallocation of connection capacity to strategically important projects. Separately, the Department for Business, Innovation, Science and Trade opened a consultation on a draft National Policy Statement for data centres, which would guide decisions on applications under the nationally significant infrastructure regime in England. It closes on 8 January 2027.

The Budget text thus puts figures from the 24 October announcement into the fiscal document and adds the data-centre conditions. The consultation, which invites responses from operators, local authorities and communities, is the next step for the planning side.