UK government’s Industrial Strategy promises £3.5 billion for tech

Major push in quantum, semiconductors, AI and data

The UK government’s Industrial Strategy aims to remove business barriers and promises great things for tech – but where is the money?

The government has unveiled a 10-year industrial strategy aiming to establish the UK as a global powerhouse in cutting-edge technologies through a combination of research funding, streamlined regulations and targeted investment across key tech sectors.

Launched on Monday, the strategy lays out a vision to accelerate innovation, reduce business friction and support so-called frontier technologies, with the ultimate goal of stimulating economic growth and enhancing the UK's global competitiveness.

Key takeaways from the UK’s new Industrial Strategy:

• Lofty ideals and big promises intended to lower barriers for business
• Eight sectors, including tech, to receive funding boosts in key areas, including:
  • £2 billion for AI
  • £670 million for quantum computing
  • £370 million for telecoms and connectivity
  • £54 million for semiconductors
  • £36 million for data
• More access to finance through the British Business Bank
• Lighter regulatory requirements

In depth

As part of the strategy [pdf] the government has committed to turning the UK into a global leader in quantum computing by 2035.

Backed by a £670 million funding package, Labour has confirmed 10-year support for the National Quantum Computing Centre, providing long-term certainty to researchers and innovators.

Quantum computing holds the potential for transformative advances across sectors, from medical imaging to materials science.

Quantum sensing and imaging technologies are already being piloted for practical applications. Trials have been conducted to improve the accuracy of locating London Underground trains using quantum sensors.

Tom Grinyer, Chief Executive of the Institute of Physics, called the UK's quantum agenda "a game-changer for humanity," placing it on par with AI and the internet.

"If we don't invest, others will — and we risk being left behind in the post-quantum world," he warned.

In the semiconductor arena, the industrial strategy pledges £19 million to establish a UK Semiconductor Centre, envisioned as a hub for domestic and international firms to collaborate, scale up operations and strengthen supply chain integration.

A further £35 million is allocated to the Semiconductor Talent Expansion Programme, aimed at closing the skills gap with chip design courses, master's conversion programmes, bursaries and school outreach initiatives.

Telecommunications and connectivity also receive a major boost. With £370 million earmarked, the plan includes £240 million for R&D into advanced connectivity and £130 million for enhancing the UK Telecoms Lab to fortify network security and reliability.

AI stands out as a top priority under Labour's 50-point AI action plan, with over £2 billion allocated to support its implementation. The government's vision includes greater access to high-quality datasets, a prerequisite for successful AI development.

Additionally, £36 million will extend smart data initiatives, and £12 million, beginning in April 2026, will fund UK Data Sharing Infrastructure Initiatives, promoting better governance, interoperability, and security in data systems.

Industry watchers and stakeholders have welcomed the new Strategy, with Mark Boost – CEO of UK cloud provider Civo – saying its ambition is “exactly what the UK tech industry has been asking for.”

However, he added: “But we've been here before. Promises on sovereignty ring hollow when billions still go to overseas cloud giants while British providers are overlooked."

Sam Hields, Partner at early-stage tech VC OpenOcean, was also positive about the announcements, commenting: "This modern Industrial Strategy is much closer to what we need: clear-eyed, more ambitious, and focused on making the UK a place where real innovation doesn't just happen by accident, but by design."

"The strategic pivot toward sectors like quantum computing, advanced manufacturing, and energy is essential. Too often, we've let great UK-born ideas become success stories elsewhere. The increased British Business Bank financial capacity to £25.6 billion, with a fresh £6.6 billion for growth-focused investments, is critical but overdue. It's a belated vote of confidence in venture capital, finally addressing the fundamental barriers to private investment, notably the faulty perception that venture investments inherently carry greater risk than more traditional avenues."

Computing says:

The questions nobody seems to know the answer to is “Where is the money coming from?” The previous Conservative government was also great at promising big things for the tech sector over a period of years, but when the time came to pay up those ambitions were quietly swept under the rug.

We also hope that the money for the semiconductor industry will be well targeted, unlike the previous government’s National Semiconductor Strategy.

And more than anything, one of the major aims of the new Strategy should be to keep British tech businesses at home. Too often we’ve seen firms like Arm, Darktrace, Oxford Ionics and Alphawave become success stories elsewhere.