00:00Francine was just outlining some of the announcements that you and the government have made this morning.
00:04Top of mind for me really is what you've announced around hardware and supporting UK semiconductors.
00:08What are the details? What money are you putting into play? What are the potential opportunities?
00:12Tom, it's an incredibly exciting start to London Tech.
00:15We have announced a major hardware plan and the crux of it is we are going to re-industrialise Britain
00:20to make sure that Britain's got a place in the AI chips world.
00:23So in particular, the Prime Minister has announced just now ÂŁ400 million for the British state to buy top-tier
00:29chips made by British companies.
00:30That's going to be really critical.
00:32Alongside that, we're expanding the Scaling Inference Lab, a facility that validates chip quality quickly
00:37so that British startups are first in the queue when they're coming to sell as well.
00:41So real money, but also real capability.
00:43That is a big ambition, the re-industrialisation of the UK.
00:47And you will hold to that commitment. You'll be tested on that in the years ahead.
00:50And you're confident that that's going to happen?
00:52I'm very confident of it. And not only because it's a promise for the future, but because it's grounded in
00:56our heritage and our past.
00:58The fact that a Labour government under Callaghan backed in Moss, spawned the semiconductor cluster in Wales
01:03and led to the creation of companies like Arm, Graphcore, the entire cluster in Bristol, Isenbad, AI.
01:09This is in our past. It's in our heritage. It's going to be in our future.
01:12On semiconductors, we have to pick our spots, don't we, Minister?
01:16We're not going to be producing an NVIDIA or an AMD in terms of GPUs that dominate the training and
01:22inference
01:23of some of these large language models. Where can the UK play?
01:27Where can the UK have an advantage and create material growth and scale in semiconductors?
01:34Tom, you're totally right, which is over the last 15 years, this country fell behind in terms of reviving its
01:38heritage and chips for the future.
01:40What we are doing is saying, of course, today we have to partner with NVIDIA and AMD.
01:45They're great partners for us. We're announcing a series of things with them today.
01:47The bets we're placing are for the future. And for the future, we're placing two types of bets.
01:52One, we think inference is going to be critical. Companies like Fractal are going to have a great future.
01:57We want to be right behind them as well.
01:58Two, we also think we want to play some big bets for the longer term.
02:02Things like Photonics, which are the next generation of bets that you make, which if they take off,
02:07will mean that Britain is right at the frontier as well.
02:09They're great companies, great academic strengths in those areas as well.
02:12Companies like Olix, for example, we're placing both of those bets.
02:15The $400 million commitment doesn't sound like a significant number when you're thinking about an NVIDIA
02:21with a market cap of north of $4 trillion just for one single company.
02:25What do you hope that $400 million does? Do you hope that private capital gets led on to that?
02:30What are your conversations with private capital, with long-term growth funds that could help accelerate that shift?
02:36Well, Tom, that's the first crumb we're laying at the start of the trail in London 10 weeks.
02:40It is a crumb. It's a crumb.
02:41And so there's a lot more to come in the hours ahead on hardware in particular.
02:47And so you should watch out for that.
02:48But look, there are two core principles.
02:50One, Britain's got absolute frontier ambition when it comes to chips.
02:53We understand the scale of the requirement there.
02:55But the second thing to say is we want public value for money.
02:57The conversations I've had with private investors,
02:59almost half a billion raised by fractal and Olix in just the last few months.
03:03So there's a lot of money pouring into this in British chips.
03:05We want the British public sector to play its role appropriately, but in a proportionate way, to make sure we're
03:10reaching the frontier.
03:11How can we win if we don't have the infrastructure or the energy?
03:15Well, we can't, and that's why we're building them.
03:17But our energy costs are three times that of the US.
03:20How do we solve the energy piece that will power the data centers of the infrastructure?
03:24By being very, very focused on the deals that we need to land,
03:26rather than the kind of big picture concern that people bring up on this question.
03:30But we need to bring down, we have to bring down energy costs.
03:32Of course, of course that's the case.
03:33North Sea oil could play a role.
03:35Well, I actually think if you speak to anyone trying to build a data center over the next 12 months,
03:39the idea that the North Sea oil turning on might do something or not in a few years' time,
03:43it's actually not here and all that.
03:44The big picture thing is we are making reforms that accelerate data centers.
03:48AI growth in this country get first dibs on the queue.
03:51They get savings shared back if they build in the Northeast and Cumbria in areas of excess generation.
03:55There's plenty of demand in this country.
03:57And the crux of it is getting people onto the grid quickly,
04:00rather than thinking about the long-term political debate on North Sea or not.
04:04And so from my point of view, the dealers roll up our sleeves, get these deals done today so that
04:07Britain can secure its future.
04:09Talking of politics, when I speak to people in this ecosystem, they do interface with you.
04:14They interact with you.
04:15And broadly, people are very positive about what you and the team have been doing to try to help this
04:20ecosystem.
04:21But the question is, will you be in place in three months or six months, given the political volatility here
04:26in the UK?
04:27I mean, the political instability is a challenge, isn't it?
04:29How much of a headwind is that?
04:31Well, the big picture, Tom, is that I think over the last 18 months in this government, we have had
04:36a very clear execution.
04:37We have delivered 75% of the AI plan that we set out.
04:40We're going to get to 100% and get it over the line.
04:42And from my point of view, every day I'm in this job, I'm running off my sleeves with the team,
04:46getting as much done as I can.
04:47Andy Burnham says he would take a tougher role or a tougher look at regulation around AI.
04:53Should we be regulating more?
04:55I think the crux of it, from an AI point of view, is how do we build trust and keep
04:59our people safe?
05:00This morning, his prime minister has announced a major plan on device-level support to make sure that children are
05:05protected from child abuse.
05:06We have acted to make sure that when Grok was nudifying women and children's images, we acted fast.
05:11We were one of the first countries to get that overturned.
05:14And so, again and again, we're focused on outcomes, the mechanism of delivery, people can debate in the context of
05:18elections.
05:19What I'm focused on is delivering outcomes to the British public.
05:21An EU approach to regulation would be the wrong prescription for the UK around AI.
05:25Well, look, I think one of the things I've most valued is the British public's appetite for pragmatism.
05:29And I think that is the defining philosophy for this government.
05:32We want the best security trust for the British public when it comes to AI.
05:36We will pursue the mechanisms that make that deliver, rather than looking at obsessively the mechanism for how we get
05:42there.
05:42How much disruption in the jobs market should we be bracing for at this point?
05:46Well, look, here and now, I think we're running ahead of our skis a little bit on the jobs concern.
05:51Frankly, the biggest thing is how many jobs can we create here and now, and how can we support young
05:55people in every part of the country?
05:56Long term, I think there is a big question to be asked, because AI is transformational, and I think the
06:01speed and scale of this will be very, very significant.
06:04The task for us is how do we get on that bus and turn the steering wheel in the direction
06:08of British values and support for the British public.
06:10What specifically does that mean?
06:11What policies are you putting in place around jobs in the labour market?
06:14Well, a really critical thing the Prime Minister has announced this morning is a new tool to bring frontier technology
06:19to the dignity of people in every part of this country.
06:21So we will now match millions of people in every quarter in this country who look for new jobs.
06:26They will be better supported into the best paid jobs by using AI.
06:29Young people outside of education are at risk of dropping out before GCSEs.
06:34They will be supported because the frontier of technology under this labour government will be put to the dignity of
06:38labour in every part of this country.
06:40Minister, you were a former venture capitalist yourself.
06:43Concerns again about an AI bubble, an AI bubble bursting.
06:45We're seeing that in the public markets today with a significant sell-off.
06:49Is this a bubble, and is there a risk that it could burst?
06:52Is it looking frothy to you, Minister?
06:53Well, the caveat is this.
06:55A bubble is a dispersion of price relative to value.
06:58What I'm focused on is delivering value for the British public regardless of where the pricing is in terms of
07:02the equity markets.
07:03But look, the second thing is, of course, we're continuing to look at whether or not the equity context is
07:07one where there are financial concerns for the wider British public.
07:10We will continue to do that.
07:12From my point of view, it's a kind of constant chaser of the tail.
07:15Do you think valuations are looking stretched?
07:18Trillion dollars for open AI, trillion dollars for Anthropik?
07:20I changed my mind on this like the markets do on a pretty 24-hourly basis.
07:24I think the crux of it is the new normal is volatility.
07:27Whether the price is at the right level or not, I think is an open question.
07:30We're all trying to figure that out.
07:31The volatility of it, I think, is an enduring feature.
07:34And so we want to make sure that Britain and the British public in particular rise that volatility in a
07:38stable way from a public point of view.
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