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UK Government to Sharply Increase Funding for AI and Video Games in Economic Boost
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A significant restructuring of the U.K.’s research budget is underway, with potential funding increases of up to 100% earmarked for key sectors like artificial intelligence (AI) and the video game industry, according to reports published on Wednesday, December 17th. The move signals a strategic shift towards prioritizing innovation and economic growth.
Reimagining UK Research and Innovation
The planned increases come as the U.K.’s research funding agency, UK Research and Innovation (UKRI), seeks to more effectively drive economic prosperity. Sir Ian Chapman, chief executive of UKRI, candidly assessed his agency’s current performance as a “three out of 10” in fostering growth, and indicated a desire to align funding with government priorities.
“We’re going to go after that,” a senior official stated, emphasizing the agency’s commitment to supporting high-growth potential areas.
The government has already pledged a 14% increase in overall research spending by 2029-30, bringing the yearly total to 10 billion pounds ($13.4 billion).Chapman revealed plans to allocate “pretty much all” of this increase to projects with demonstrable growth potential.A substantial 1.6 billion pounds ($2.1 billion) will be specifically dedicated to AI growth over the next four years.
Creative Industries Poised for Growth
While AI receives a significant boost, the creative industries are set to experience the largest proportional increase in funding – ranging between 50% and 100%. A total of 369 million pounds ($494 million) will be invested in bolstering sectors like film, music, and video games.
Chapman highlighted the video game industry as a “big, significant global market,” noting the U.K.’s position as a hub for successful companies. he further explained that “there is a lot of underpinning high tech in that, and so innovation and research can really drive you to higher quality products.”
The Rise of the AI-Powered Connected Economy
The focus on AI aligns with a broader trend of increasing reliance on AI-powered tools in daily life. Recent data from PYMNTS Intelligence reveals that 1.8 billion people worldwide now interact with AI models from companies like OpenAI, Anthropic, Google, xAI, and Perplexity each month.
More than half of the U.S. population is now utilizing these platforms for more than just search, integrating them into the “pillars of the connected economy” – encompassing activities related to shopping, payments, work, health, and entertainment. The research identifies 30 million “power users” who leverage chatbots for 25 or more of the 54 activities that define this connected ecosystem. Over 80% of these power users employ chatbots for tasks such as shopping discovery, daily planning, learning, and health and wellness.
“In just three short years, more likely in just the last 12 months, they’ve rewired their entire digital footprint around these conversational interfaces,” noted PYMNTS CEO Karen Webster.
