A quantum quandary for the UK government

This report comes from the British CNBC exchange form this week. Every Wednesday, Ian King gives you expert information on the most important commercial stories in the United Kingdom and key personalities that shape the news. The newsletter will also highlight other key developments in the United Kingdom that you will not want to miss, as well as an overview of essential events that are ready to make waves. Like what you see? You can subscribe here.

Its rise by refusing millions of retirees, the winter fuel allowance was not the only one Backtrack Announced by Rachel Reeves, the British chancellor of the chessboard this month.

Less significant in political terms, but great importance for the long-term growth potential of the United Kingdom, was an announcement on June 10 according to which the government would initiate $ 750 million pounds ($ 1 billion) of funding for a new Exascale supercomputer, capable of carrying out a five-lillion (a billion billion dollars) per second, at the University of Edinburgh.

The news canceled a previous decision, taken a few days after the Labor government was elected in July of last year, in order to draw around 800 million pounds of funding for the project announced by the administration of former Prime Minister Rishi Sunak in 2023. Edinburgh had already spent around 30 million pounds Sterling for support infrastructure and the decision has dismantled the United Kingdom’s scientific community and once, at the time the United States was two. Building theirs would leave Great Britain to laggle its peers.

The moment of the U-turn was not a coincidence.

Two days later, to mark the start of London technology week, Prime Minister Keir Starmer Shared a platform with Jensen HuangFounder and CEO of Nvidia, where the two impatiently spoke the power of artificial intelligence to transform lives.

During the session, however, Huang had a striking warning for the United Kingdom

“The United Kingdom has one of the richest IA communities in the world on the planet. The deepest thinkers, the best universities of Oxford, Cambridge and Imperial College, incredible startups like Deepmind, Wayve, Synthesia, an incredible research community,” he said.

“It just lacks one thing. It is the largest ECOC ecosystem in the world without its own infrastructure.”

Cynics will say that Huang’s message – The flea manufacturer urges more investment in infrastructure that requires fleas – does not seem so different from a broker by urging customers to buy shares.

It is inconceivable, however, that the government would not have been informed in advance. And the restoration of financing the edinburgh supercaluler suggests that the message landed with Starmer and Reeves.

However, the British technology sector faces other challenges. The first is that IA startups in the United Kingdom are well behind their American and Chinese peers in the sums they raise money capital. It is potentially, a shorter term weakness, such as a shortage of Sovereign IT infrastructure of AI.

However, a broader concern is that the United Kingdom can lose momentum in quantum computer science, the revolutionary way of processing information faster than conventional IT.

Just at the top of the A40 Trunk Road, the same day Starmer was on stage with Huang, the quantum startup Oxford Ionics, a spin-off from the University of Oxford, agreed to take control of $ 1.1 billion per IONQ, based in Maryland.

The sale relaunched the concerns, for the first time when the start-up of AI Deepmind was bought by Google in 2014, that the United Kingdom is nothing more than a “incubator”, where companies are born before being extended elsewhere.

Like Tina Stowell, former president of the Communications and Digital Committee of the Chamber of Lords, said: “I am really sorry for her loss for the United Kingdom as a British company, even if, under a new property, she continues to work here.”

“What we have seen this week is another example of a disturbing trend,” she added.

We fear that other societies in space can follow suit.

“This [takeover] is a reflection of the superior quality of British quantum R&D, built on decades of public funding, but also an example which will be closely monitored by other quantum companies looking for capital and opportunities that can be difficult to find in the United Kingdom “, Ashley Montanaro, co-founder and CEO of the quantum software company Phasecraft, wrote in an article for British industry of the UKTN technological industry.

“There is already more public funding available for quantum companies in the United States than in the United Kingdom, more scholarships, more subsidies and state and federal contracts, and more scale support and deployment.”

“Even with the president [Donald] Trump’s recent decline against universities, private capital finally follows public money, and several of our peers have joined us in the laboratories to open abroad to access such support, knowledge and capital, “he added.

Stressing the delays on the implementation of the national quantum strategy of the United Kingdom, announced two years ago, he noted that there would be no new government funding for quantum IT projects until the fall as soon as possible-while at the same time, the United States was doubled federal quantum funding and other countries, among them Canada and Finland, had advanced investments in the field.

Montanaro continued: “Once the talent, the capital and the momentum go elsewhere, they rarely come back.”

The newly rediscovery passion of the British government for superordinators who will help fuel the AI ​​revolution is comforting. But AI is only part of the technological ecosystem of the United Kingdom and concern must be that, in areas like quantum computer science, it is real in danger of delay.

The reverse

Meanwhile, although Starmer and its ministers now seem to see AI as a non -combined force for good, others can disagree.

This week, in a rare interview, Alison Kirkby, Director General of BT, told Financial Times that the company provided for Cut more than 40,000 jobs And eliminating 3 billion pounds sterling of costs by the end of the decade “did not reflect the full potential of the AI”.

She said to the newspaper: “Depending on what we learn from AI … There may be an opportunity for BT to be even smaller by the end of the decade.”

Most jobs that should go within the framework of the existing plans were those of engineers specifically hired to build the network of BT fibers whose roles have become redundant once the project is finished.

The chances are that, in this case, Kirkby referred to the BT call centers, which employ thousands of people in places such as Plymouth, Greenock and North Tyneside, as well as the HR functions of the company.

Starmer and his colleagues may need to persuade the public – and the traditional donors of their party in unions in particular – that AI is a force for good rather than the simple cost cut.

– Ian King