UK government looks to strike AI chip deals with tech giants

In line with the government’s plan to make the U.K. a leading artificial intelligence (AI) player, Prime Minister Rishi Sunak is reportedly finalizing a deal with technology giants for a consignment of AI chips.

The U.K. government has opened negotiations with Nvidia (NASDAQ: NVDA), Intel (NASDAQ: INTC), and Advanced Micro Devices (AMD) (NASDAQ: AMD) to purchase up to 5,000 graphics processing units (GPUs), According to a Telegraph report. The U.K. is keen on using AI chips to establish an AI Research Resource center before the end of 2024 to foster local innovation in the industry.

Bolstered by a $130 million budget, the negotiations are spearheaded by the U.K. Research and Innovations, with talks with Nvidia said to be at an advanced stage. While the report did not disclose the specifications of the chips, pundits believe that the negotiations are for Nvidia’s latest class of AI chips with the pioneering HBM3e.

Despite the budget running into millions of dollars, critics have warned that the amount is insignificant in the long run if the U.K. wants to catch up with leading jurisdictions. Several independent studies have pointed out a lack of computing resources for researchers in the U.K., with only 1,000 chips available nationwide.

Early in the year, a government review recommended the purchase of up to 3,000 AI chips to remedy the nationwide shortage, but the Rishi Sunak-led Cabinet appeared to have other plans. Chancellor of the Exchequer Jeremy Hunt earmarked over $1 billion to build an exascale supercomputer with only a fraction of the amount budgeted for AI resources.
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“By investing in emerging technologies through our new expert taskforce, we can continue to lead the way in developing safe and trustworthy AI as part of shaping a more innovative UK economy,” said Prime Minister Sunak.

The government followed the move, announcing that it had secured early and priority access from Google for its upcoming AI products in a strong show of regulatory strength. Meanwhile, the country’s opposition government is pushing for even stronger regulations for AI, mandating that large language model (LLM) platforms should seek licensing before operating.

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