United Kingdom launches £100M AI procurement scheme for startups

The United Kingdom has launched the first competitions under its Sovereign AI Research and Development Procurement Scheme, a programme with an estimated total value of approximately £100 million. Unlike traditional grant programs, this initiative functions as a procurement model where the government acts as an early customer, purchasing research and development directly from British AI startups and small-to-medium enterprises.

The scheme focuses on four primary challenge areas: NHS productivity and workflow automation, compute efficiency for AI infrastructure, the integration of AI within defence systems, and security testing for AI agents. The participating buying departments include the Ministry of Defence, the Department of Health and Social Care, and the National Cyber Security Centre.

Contract terms are designed to support cash-constrained companies, offering durations of 12 to 24 months and provisions for upfront payments. Notably, participating vendors will retain the intellectual property created during projects, while the government receives a licence to use the outputs for public-sector purposes. Individual contracts are expected to range between £1 million and £3 million, though they can vary from £250,000 to £10 million. The first application deadline is set for 1 October 2026.