AI deals in the UK totalled $3.7bn (£2.9bn) in 2023. Credit: Getty Images/bankkgraphy.

The UK’s new Labour Government has decided to shelve £1.3bn of tech and AI project funding promised by the Conservatives, a move that has been slammed by experts as a “setback” to the UK’s tech superpower ambitions.

Within the funding package, the Conservatives promised £500m for AI research resources and £800m for the creation of a supercomputer at Edinburgh University. 

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Labour claimed that the Conservative’s promises for UK AI funding were “unfunded commitments”. 

A spokesperson for the Department for Science, Innovation and Technology said: “The government is taking difficult and necessary spending decisions across all departments in the face of billions of pounds of underfunded commitments. This is essential to restore economic stability and deliver our national mission for growth.”

Science Secretary Peter Kyle said last week that he was aiming to put “AI at the heart of the government’s agenda to boost growth and improve our public services”.

Fraser Stewart, chief commercial officer for Lyfeguard, said that the decision to cancel funding for key tech and AI projects “is a setback for the UK’s global technology superpower ambitions”.

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The decision could “stifle the next innovations that could have been key to business and economic growth”.

“Restricting investment may limit the benefits to people and businesses moving forward, so hopefully this is not the start of a trend of tech funding cuts,” Stewart added.

The value of AI venture financing deals in the UK reached a peak in 2023, according to GlobalData’s deal database.

AI deals in the UK totalled $3.7bn in 2023, marking a significant increase from just three years prior, which saw deals total $1.5bn.

The value of deals in the UK saw a slight decrease in 2022, totalling $2.8bn, a slight increase from $3.5bn in 2021.