Sir Keir Starmer has announced that the government is set to invest an extra £1 billion in scaling up computational power by a factor of 20.

Speaking at London Tech Week 2025 on Monday, the prime minister explained that the extra investment aims to boost Britain’s AI computational capabilities, positioning the UK as an “AI maker” rather than an “AI taker”.

The investment is aimed at developing digital infrastructure that can improve public services and directly benefit working people, supporting the country's technological and economic growth in AI, the prime minister said.

The announcement forms part of the government's wider strategy to improve Britain's AI technological capabilities and digital infrastructure that can drive innovation and improve public services.

“By committing these resources, the government aims to show that Britain is serious about being at the forefront of AI development, with a clear focus on using technology as a tool for social and economic progress,” he said.

Starmer added: “It's an ambitious vision of technology serving human needs, rather than technology being an end in itself.”

At the event, the government also announced a £1.5 billion investment from multi-million AI driven asset management firm Liquidity to base its European headquarters in London.

Starmer said the move signals the capital’s attractiveness as a global tech hub and the UK's potential in the AI and technology sectors, strengthening the UK’s position as a stable and innovative business destination.

Starmer highlighted the positive economic impact the AI sector is already having in the UK, explaining that the industry currently supports over two million jobs.

“In 2023, the AI sector grew 30 times faster than the rest of the economy,” Starmer said.

He added the country is repositioning itself as an attractive destination for tech and AI investments, after a period of “chaos”.

“The goal is to present Britain as a confident, forward-looking nation that welcomes innovation and international collaboration,” he said. “Britain wants to signal to the world that it is a stable partner to investors, committed to shaping the future through democratic values, and it’s definitely open for business.”Starmer emphasised the transformative power of AI and tech in various sectors, including health and defence, highlighting AI’s role in stroke diagnosis and military operations in Ukraine.

He added that AI is playing an increasingly important role in national security and defence planning, with the Strategic Defence Review aiming to make sure the country's technological capabilities can effectively address emerging threats.

The Strategic Defence Review is a review of the UK's defence policy, published on 2 June 2025.

It is the first such review carried out by a Labour government since 2003, and was led by former NATO Secretary General Lord Robertson, with oversight from defence secretary John Healey.

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