The UK government has announced plans to establish a new AI research laboratory, backed with up to £40 million of funding.

The Fundamental AI Research Lab aims to accelerate breakthroughs that could transform sectors including healthcare, transport and science.

According to the government, the lab will support ambitious, high‑risk research designed to tackle longstanding technical challenges that still limit the capabilities of AI systems.

UK researchers will be invited to submit proposals for AI projects, with successful teams gaining access to large‑scale computing power through the UK’s AI Research Resource, which the government said will provide additional support worth “tens of millions of pounds”.

The government added that the lab will focus on fundamental or “blue sky” research, rethinking how AI systems are built rather than simply scaling up existing models with more data and processing power.

The work will explore persistent issues affecting modern AI models, including hallucinations, short memory and unpredictable reasoning.

The government said that solving these challenges could make future AI systems more accurate and transparent, paving the way for improved digital tools and faster scientific discoveries.

The launch of the lab forms part of the wider UK Research and Innovation AI strategy, which will spend £1.6 billion over the next four years to support research and innovation.

AI minister Kanishka Narayan said that AI is already doing things such as helping to diagnose cancer, which would have been impossible a few years ago.

“It can and will do even more – but if we want this technology to be a force for good, we need to make sure the next big AI breakthroughs are made in Britain,” he said. “This is a long‑term investment in the brilliant minds who will keep the UK in the AI fast lane.

“If we are the ones breaking new ground on what AI can do, we can make sure our values are baked in from the outset.”

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