Small and Medium-sized Enterprises: AI Sector

Lord Walney Excerpts

Thursday 29th October 2026 Lords Chamber

[Lord Leong (Lab)]

I hear what the noble Lord, says but I say again that our £100 million R&D procurement scheme will help British start-ups develop innovative solutions to government challenges. We are making government a smarter, more accessible customer and creating procurement opportunities for smaller firms instead of favouring established suppliers. Through the sovereign AI fund, we are also supporting early start-up procurement, enabling innovative businesses to demonstrate that technologies generate revenue and attract private investment.

I encourage noble Lords to visit local university science and technology hubs and see innovative AI companies. I was up in Manchester yesterday and there I saw young people and exciting projects. Perhaps noble Lords could go out to university science parks and be encouraged by what is being developed in this country.

[Lord Walney (CB)]

My Lords, does the Minister agree that the Government’s support for, and adoption of, an open source AI framework could greatly reduce the barriers to entry for smaller firms and accelerate investment, particularly if this could be done in partnership with allied nations across the world?

[Lord Leong (Lab)]

I agree with the noble Lord. That is why the British Business Bank has £25.6 billion in financial capacity to support smarter and smaller businesses, including £4 billion in growth capital specifically for innovative research-intensive companies. The sovereign AI fund works alongside the bank, including co-investing in a company called Ineffable Intelligence, a London-based artificial intelligence research lab. Meanwhile, the National Wealth Fund, with £27.8 billion to deploy, is mobilising private investment in AI infrastructure, including a guaranteed £202 million to support various AI companies.