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AI UK: Navigating the Future

Updated: Apr 8




I have written many articles about the impact of artificial intelligence (AI) that cover topics such as how AI can be leveraged to close the UK’s productivity gap, the need for a new social contractaugmented workforces, charting a career path in the age of AI, using AI in your personal life and the power of AI to transform organisations to grow faster, optimise costs and be more successful. 

In a winner takes all race for technological, economic and market dominance powered by the productisation and commodisation of intelligence, we have to think bigger and longer term as a nation. This fourth industrial revolution will be the last powered by human ingenuity and the advancement of technology will be constant, recursive, and compounding.  Within two decades, AI will play a part in the development of commercial nuclear fusion and cheap energy, quantum computing, carbon management, and cures for diseases and genetic conditions that plague humanity. The combined effect is transformative. 


In an exponential world, a government that fails to prioritise the development of a national strategy over one or two terms could leave the UK unable to catch up those nations that have embraced an inevitable future. We need to invest, develop appropriate policy and take action, to ensure that the UK prospers.


 1.      Tech stack, country stack & wealth creation



Where is the value?


 2.      Understanding the AI Technology Stack


It is important to understand the technology stack, which will also evolve.  Where expensive application and user-interface development once soaked up billions of venture capital fund money, AI models and natural language interfaces are democratising access to software development. AI will create huge wealth, up and down the technology stack, and it will not be evenly distributed. 

For example, the UK is not going to host semiconductor fabricators (FABs), although we have a history in CPU chip design (e.g. ARM), not GPUs. Hyperscale cloud platform providers are typically US companies such as Amazon AWS, Microsoft (Azure) and Google (Cloud), although there are other capabilities in countries such as China.  The US government responded to the risk of disruption to semiconductors manufactured in Taiwan by passing The CHIPS and Science Act (2022), included $39 billion in tax benefits and other incentives to encourage American companies to build new chip manufacturing plants in the U.S.



FAB


The UK has to pick its battles carefully and commit the necessary resources to ensure the UK and its researchers and entrepreneurs can compete when even large language model (LLM) providers such as Inflection AI, which raised hundreds of millions of dollars, are already being thinned out as the market consolidates. 


  • Semiconductor fabs: Multi-billion dollar manufacturing facilities

  • Processors: High-performance processors (e.g. GPUs)

  • Hyperscale Cloud Infrastructure: Platforms like Microsoft Azure, Amazon AWS, and Google Cloud, offering vast data storage and computing power

  • AI Models: Core building blocks of AI systems, enabling learning, reasoning, and prediction

  • AI Applications and Interfaces: End-user solutions


AI refers to the broad concept of creating machines or computer systems that can perform tasks that typically require human intelligence, such as visual perception, speech recognition, decision-making, and language translation. AI is still a tool with narrow or specialised capabilities.

On the other hand, Artificial General Intelligence (AGI) refers to a hypothetical type of AI that can understand, learn, and perform any intellectual task that a human being can. AGI is forecasted to become a reality within the next 3 to 20 years. AGI would have the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly, and learn from experience, just like a human. AGI would have general cognitive abilities that match or surpass those of humans, and whereas humans take years and generations to learn and pass on information, AGI would continuously compound and evolve. Asymmetry in ownership or control of AI and/or AGI will have profound consequences.


3.      Understanding the UK/Country AI Stack


The country AI stack reflects where the UK can compete and where the implementation of AI should be supported. It also reflects a mechanism to ensure that the UK benefits from wealth creation further down the technology stack. 


  • Applications and interfaces: Development of end-user solutions

  • Individuals: Personal use of Ai to augment individuals and training in AI

  • Organisations: Private and third sector organisations leveraging AI for competitive advantage

  • Government: AI adoption and regulation

  • Sovereign Wealth Fund: Investing in the global AI technology stack to ensure the UK's participation in wealth creation 


4.      Investing in the AI-first Future


To capitalise on the tremendous wealth creation, and wealth concentration, potential of AI, the UK must take a multi-faceted approach to investment.


AI UK


The need for a sovereign wealth fund (SWF)


Establishing a UK SWF dedicated to investing in global technology opportunities, including the AI technology stack is crucial. The AI stack will be a driver of innovation across all technology sectors, including nuclear fusion, quantum computing, genomics, robotics, spacetech and advanced manufacturing.   By strategically allocating resources to support domestic AI capabilities and collaborating with leading AI companies and investors worldwide, the UK can ensure that it captures a share of the value generated by AI.  The Kingdom of Saudi Arabia has already announced a $40bn fund to focus purely on AI that will co-invest with well-known technology investment firms. 


The development of AI, which will impact all other technologies, leaves the UK with no real option other than to establish a SWF. A SWF will generate national wealth and act as a hedge against competitive global wealth creation.


Supporting AI startups and entrepreneurs


The UK must continue to foster a thriving ecosystem for AI startups and entrepreneurs by providing access to funding, mentorship, and resources. The difference going forwards is that a sense of national urgency is required.  If there is any silver lining to the Brexit act of national self-harm, it is that we are now less restricted by EU law and can provide more support without having to worry about state-aid rules.   Tax incentives for investment and R&D should be enhanced.  As a former board member of the government-owned British Business Bank, I still believe that it should be unshackled from the endless red-tape, fear and bureaucracy that will be imposed on it by any government.  The UK has to continue nurturing homegrown talent and attracting global innovators to maintain its position at the forefront of technology innovation.  It is no longer a ’nice to have’.


Collaborating with global AI leaders


To stay ahead in the AI race, the UK must actively collaborate with global AI leaders, including leading tech companies, research institutions, and other nations. By forging strategic partnerships, the UK can gain access to cutting-edge AI technologies, share knowledge, and drive joint research and development efforts. This collaboration will be essential in ensuring that the UK remains competitive in the rapidly evolving AI landscape.


It can be driven, in part, by a SWF, which needs to forge such relationships in order to be able to deploy capital up and down the entire AI technology stack.


Investing across the global AI technology stack to ensure UK's share in wealth creation


The UK must take a comprehensive approach to AI investment, allocating resources across the entire AI technology stack. This includes investing in domestic chip design and manufacturing capabilities, supporting the development of high-performance processors, and partnering with hyperscale cloud providers. By strategically investing across the stack, the UK can secure its position in the global AI value chain and maximize its share of the wealth generated by this transformative technology.


Preparing the Workforce for the AI Era


As AI transforms the nature of work, it is crucial for the UK to take proactive steps to prepare its workforce for the AI era:


Adapting the education system and reskilling

The education system must be adapted to equip students with the skills and knowledge needed to thrive in an AI-driven world. I spent two years persuading my teenage son to learn to code and now agree with him that it is a waste of time.  Computer and data science, computational thinking and STEM subjects remain important, but when we can talk to technology and code becomes invisible, creative use of technology will be key.  Just as Singapore is doing, we need to provide training opportunities for a citizens that may need to retrain several times as AI replaces human cognitive and physical labour.


 It takes decades to change the education system, which is too long.  Some bold decisions are going to have to be made about how and what we teach the next generation.


The impact of AI on cognitive and physical labour

While AI has the potential to drive productivity and economic growth, it is essential to acknowledge and address its potential impact on employment if new roles are not created to replace those displaced by access to cheap cognitive labour. 

Office of the future?


In the longer-term embodied AI (robots) will start to displace physical labour and after many false robotic dawns, there are signs that the combination of LLMs and robot platforms will spark the development of robots that will eventually be a feature of everyday life - first in commercial settings and then for consumers.


Figure AI + OpenAI


The UK must develop strategies to support workers who may be displaced by AI automation, such as providing transitional support, retraining opportunities, and exploring new job creation in AI-related fields. By proactively addressing the long-term implications of AI on the workforce, the UK can ensure a smooth and inclusive transition to an AI-driven economy. 


 5.      Socio-Economic Implications of AI


The rise of AI presents both immense opportunities and challenges for society, and it is crucial for the UK to proactively address the socio-economic implications of this technological revolution. Wealth creation will remain important if the working population shrinks over time due to increased productivity and a lack of new roles. It remains to be seen what the impact of productised intelligence will be, compared to computing capability.


Income distribution and wealth concentration


As AI drives productivity and economic growth, there is a risk that the benefits may not be evenly distributed.  In fact, it is highly likely that they will not be.  Enormous wealth will accrue to a small number of companies and individuals.  The good news is that many of the companies are, or will be, publicly quoted and positions can be taken.


The UK must take steps to ensure that the wealth generated by AI is fairly shared among all segments of society, rather than concentrated in the hands of a few. Inevitably, those who can afford technology will benefit most, although a child in a remote African village can now access all of human knowledge and productised intelligence on a tablet running a local LLM. 

Policies that promote inclusive growth will need to be implemented and measures to prevent excessive market consolidation, although the big players are not within the control of the UK’s regulators.


UK Government role in ensuring fairness, inclusiveness, and ethical AI


The Government must play a proactive role in shaping the socio-economic landscape of the AI era. This includes developing policies and regulations that promote fairness, transparency, and accountability in the development and deployment of AI systems.


The UK Government has adopted a principles-based, non-statutory, and cross-sector framework for regulating AI, aimed at balancing innovation and safety. The framework is underpinned by five core principles: safety, security and robustness; appropriate transparency and explainability; fairness; accountability and governance; and contestability and redress. Existing regulators will implement the framework within their respective domains by applying current laws and issuing supplementary guidance.


The Government should also invest in programs that ensure equal access to AI education and training, as well as initiatives that support underrepresented groups in the AI workforce. The aim is to reduce the disparity between those with access to AI.


Exploring future fiscal policy


To address the potential economic disruptions caused by AI, the UK must explore new and innovative fiscal policies. This may include considering measures such as universal basic income (UBI), which could provide a safety net for those displaced by automation, which could be a sizeable part of the current working population. As with education, the key must be to do this before it becomes an imperative that is rushed given that the shift to an AI-first economy will be permanent. 


6.      AI and National Security


AI has significant implications for national security, and the UK must take a proactive approach to address both the opportunities and challenges presented by this technology.


Protecting against AI-related threats


As AI becomes more sophisticated and ubiquitous, it is essential to protect against potential threats, such as cyber-attacks, data breaches, and the malicious use of AI by adversaries. The UK must invest in robust cybersecurity measures, develop secure AI systems, and collaborate with international partners to establish global standards for AI security and governance.


Economic power and national security


AI has the potential to significantly impact the global balance of power, with nations that lead in AI development and deployment gaining a strategic advantage. The UK must recognise the importance of AI as a key driver of economic competitiveness and national security. By investing in AI research, talent, and infrastructure, the UK can position itself as a global leader in AI and secure its economic and strategic interests in the long term.


During my tenure as a Non-Executive Director of British Business Bank, The National Security Strategic Investment Fund (NSSIF) was created to be the Government’s corporate venturing arm for dual-use advanced technologies. NSSIF provides 'patient capital' for advanced technology firms and leveraged Government technology expertise. NSSIF includes AI and data analytics, but has a specific focus and it remains difficult to prevent innovators from being acquired by foreign companies in free markets. 


Those who control the most advanced AI and AGI will gain a significant advantage in both national security and economic power. Furthermore, the development of quantum computing, which may be assisted using AI or AGI could render all existing encryption methods obsolete, posing new challenges to cybersecurity.


 7.      The Cost of Inaction is Permanent


In the rapidly evolving world of AI, the cost of inaction is not merely significant; it is potentially catastrophic for nations that fail to adapt and embrace this transformative technology. It is also permanent as catchup will not be possible as improvements. competitive advantages and wealth compound.


The widening gap between AI leaders and laggards


As AI continues to advance at an exponential pace, the gap between nations that lead in AI development and those that lag behind will widen at an unprecedented rate. Countries that fail to invest in AI research, talent, and infrastructure risk being left behind permanently, as the AI leaders will enjoy a compounding advantage in terms of economic growth, technological capabilities, and geopolitical influence.


The risks of falling behind in an exponential world


In an exponential world, where the rate of change is constantly accelerating, falling behind in AI adoption poses existential risks to nations. Beyond the economic costs, lagging in AI development could compromise national security, as adversaries with superior AI capabilities may gain strategic advantages. Moreover, failure to keep pace with AI advancements could result in a loss of competitiveness across industries, leading to job losses and economic stagnation. 


8.      A Call to Action


We are experiencing the dawn of a fourth industrial revolution powered by AI and the UK must act now to secure its place as a global leader that leverages this transformative technology, just as the nation did with the machines and innovations of previous technological revolutions. This has to be at the individual, organisational and institutional levels.


The UK must confront the realities of an AI-driven future head-on, recognising both the immense opportunities and the significant challenges that lie ahead. This requires a clear-eyed assessment of the nation's strengths, weaknesses, and priorities in the context of the global AI and economic landscape.


Taking decisive action to securing a prosperous future for all citizens


To protect our interests and seize the opportunities presented by AI, the UK must take decisive action. This means investing heavily in AI-related technologies; supporting entrepreneurship which is now ever more key to national success; nurturing a vibrant AI ecosystem; and developing a comprehensive national AI strategy that aligns education, fiscal policy, and national security.

It may be hard for politicians to take bold steps and show era-defining leadership, but it is those who have done so in the past that we remember.  By taking bold steps to embrace AI, the UK can secure a prosperous, secure, and inclusive future for all its citizens. This involves ensuring that the benefits of AI are widely shared, that the workforce is prepared, and that the nation's values and democratic principles are upheld in the development and deployment of AI technologies.


The time for action is now. The UK must seize this narrow window of opportunity to establish itself as a global leader in AI and robotics innovation, or risk being left behind in the wake of this transformative technology. 


The nation's future prosperity, security, and influence on the world stage depend on its ability to harness the power of AI for the benefit of its citizens.


We can't afford to miss this boat


The UK has the talent, the resources, and the determination to rise to this challenge. In an exponentially evolving world, falling behind makes catch up extremely difficult. 

Missing the boat?


There is a technological and economic ship leaving the harbour, and its not coming back. We need to ensure that the UK is on it.


Thanks for reading.

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