The UK government will spend £130m on AI cyber defence, including a National Cyber Shield that uses agentic AI to protect critical infrastructure. The money is part of a package of more than £600m for AI that the Chancellor, John Healey, will put in this week’s Budget.
HM Treasury set out the plans in a statement on Saturday, ahead of the Budget on Wednesday.
Where the cyber money goes
The National Cyber Shield gets £60m. That includes a £25m challenge fund for UK AI and cybersecurity companies. The government will also scope a regulatory sandbox for agentic security tools across critical infrastructure, the public sector and industry.
Another £70m will set up a National Exposure and Real-Time Vulnerability (NERV) Centre. It will use AI tools to find cyber vulnerabilities across critical infrastructure and the wider economy.
The statement does not say when the tools will be deployed, or how far they will act without human oversight.
The AI Security Institute, which tests advanced AI models, gets a further £120m. A new NCSC AI Cyber Security Centre of Excellence in Manchester will train government cyber and AI specialists.
The plans follow a week in which the PHP2Shell flaws pushed government websites across Europe offline. AI minister Kanishka Narayan told the BBC last week that AI tools had found 500 previously unknown flaws in parts of the public sector.
“This week we’ve had a stark reminder that AI exposes some of our digital world’s weaknesses and brings new ways of exploiting them to those who’d do us harm. So we need to padlock our systems,” said Ciaran Martin, former head of the National Cyber Security Centre.
Chips, start-ups and jobs
The rest of the package backs British AI companies and research:
- £60m more for the Sovereign AI Fund, which will add a focus on physical and industrial AI, such as robotics.
- £60m for Sovereign AI’s R&D procurement scheme.
- £18m for a UK Advanced Chip Design Academy.
- £30m for local AI partnerships with mayoral authorities.
- £23m over three years for the AI Economics Institute, plus £10m a year to study how AI will reshape jobs.
- £15m for an AI Challenge Prize, starting with health.
The largest single item, £165m for biosecurity, includes the £100m AI Biosecurity Lab announced on Saturday. OpenAI and Anthropic will support it with up to £200m in model credits.
“We cannot afford to rely entirely on technology built overseas,” Narayan said in the statement.
Narayan has previously said that testing AI alone is not enough and that Britain must harden its defences.
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