UK launches AI Hardware Plan with £80m skills package for semiconductors

The government plan includes schools outreach, undergraduate bursaries, doctoral training, employer pathways, and a new Arm partnership linked to AI hardware careers.

The UK AI Hardware Plan includes investment in semiconductor skills, AI hardware innovation, procurement, and scale-up support for chip technologies

The UK government has published its AI Hardware Plan, setting out how it will support chips and semiconductor technologies used in artificial intelligence, including £80 million for semiconductor and AI hardware skills.

Published on 8 June by the Department for Science, Innovation and Technology, the plan is built around four areas: innovation, skills, procurement, and investment. It is linked to the AI Opportunities Action Plan, the Modern Industrial Strategy, and the Digital and Technologies Sector Plan.

The skills package includes expanded undergraduate bursaries, a new Centre for Doctoral Training in Chip Design, additional TechFirst support for PhD students, employer work on semiconductor career pathways, and a Strategic Industry Partnership with Arm.

The government says the plan is intended to help UK companies develop, demonstrate, deploy, and scale AI hardware technologies in the UK. It also includes public procurement commitments through a new £750 million heterogeneous AI supercomputer for the AI Research Resource.

The plan identifies a semiconductor workforce challenge, citing an estimated shortfall of 10,400 workers by 2030 if the sector grows at seven percent a year. It points to demand for chip design and verification engineers as new AI hardware companies develop and scale.

Skills funding for AI hardware careers

The £80 million skills package includes an expansion of the Semiconductor skills programme to £48 million. The government says this will increase undergraduate bursaries in subjects including electrical and electronic engineering and materials science.

The number of bursaries will rise from 300 in academic year 2025 to 2026, to 400 in 2026 to 2027, and 500 in 2027 to 2028. The program will also include expanded schools outreach and teaching fellowships intended to support chip design capability and scale-ups.

A new £12 million Centre for Doctoral Training in Chip Design will support advanced research and early-stage innovation. The plan also includes a £20 million targeted investment through TechFirst, giving 500 more UK PhD students access to top-up funding and support during their PhD.

Skills England, the Department for Work and Pensions, and the UK Semiconductor Centre will work with employers to identify pathways into semiconductor and AI hardware careers. This will include a review of the Growth and Skills Levy-funded offer, including apprenticeships, alongside other funded provision.

The government will also establish a Strategic Industry Partnership with Arm through TechFirst. The partnership is intended to connect training with industry needs in chip design and AI hardware.

Innovation and procurement commitments

The AI Hardware Plan includes £120 million for AI hardware innovation. This covers an AI Hardware Innovation Programme, an expanded Scaling Inference Lab, a £18 million Hardware Security R&D Programme, a refocused Semiconductor Catapult, and a trusted network of manufacturing and foundry partners through the UK Semiconductor Centre.

The AI Hardware Innovation Programme will be designed with UK Research and Innovation and the UK Semiconductor Centre. It will support UK-based companies through prototyping, collaborative research and development, early-stage grants, and mission-led programs.

The Scaling Inference Lab will receive at least £20 million in additional funding, building on the Advanced Research and Invention Agency’s existing £50 million investment. The lab will support testing and validation of new AI compute systems on real-world workloads.

A major procurement commitment sits inside the £750 million heterogeneous AI supercomputer for the AI Research Resource. The government says the system will allow different advanced compute technologies, including novel AI architectures and, over time, quantum computing, to be integrated into one system for research workloads.

Within that program, the plan includes a £400 million procurement opportunity for specialized chips. This includes an expanded £150 million Advance Market Commitment for novel, high-performance inference chips, up from £100 million previously announced, followed by a further £250 million procurement for additional specialized hardware.

Investment route for AI hardware companies

The plan includes a deeptech hardware venture fund led by Playground Global and backed by up to £150 million from the British Business Bank. Playground Global is also establishing its first office outside the United States in the UK.

The government says the £500 million Sovereign AI Fund will also support AI hardware companies, with compute identified as a priority. The fund will work with the Advanced Research and Invention Agency and the Scaling Inference Lab to validate technologies and build a pipeline into UK AI infrastructure, including the AI Research Resource.

UK Export Finance will support AI hardware companies seeking to scale internationally, including through the Export Development Guarantee and General Export Facility. The Export Control Joint Unit will also work with chip designers and startups on export licensing requirements where licences are needed.

The plan names UK AI hardware companies and research-linked firms including Fractile, Lumai, Oriole Networks, Salience Labs, and Callosum. It also cites Arm, headquartered in Cambridge, as a UK chip design company whose technology is used across connected devices, cloud computing, AI infrastructure, and automotive platforms.

The AI Hardware Plan will now move into delivery through the four pillars, with summer procurement planned for the £150 million Advance Market Commitment. The skills commitments include bursary growth across the next two academic years, TechFirst support for 500 additional PhD students, and employer work on AI hardware career pathways.