UK lawmaker Peter Kyle proposes modifications to AI regulations for the benefit of domestic enterprises

UK Government Announces AI-Focused Regulatory Reforms to Boost Tech Sector

The UK government is taking a significant step towards accelerating investment and innovation in the technology sector, with a focus on artificial intelligence (AI). In a speech at Mansion House tonight, technology secretary Peter Kyle will advocate for the adoption of AI to reduce approval times for businesses in the UK.

The government has announced a £2.7 million fund that will be distributed to five regulators, including Ofgem, the Civil Aviation Authority (CAA), the Office for Nuclear Regulation, and two other key UK regulators across critical sectors. This funding aims to help these regulators trial AI systems across various sectors, including drones, aviation, nuclear power, and clean energy.

Peter Kyle's regulatory reforms mark a shift towards more assertive policy making. The move is aimed at streamlining approvals, reducing red tape, and making the UK more attractive to fast-growing firms. Projects include using AI to analyze accident reports more quickly, building a "one-stop shop" for regulatory guidance, and testing new approaches to nuclear waste management.

However, not everyone is convinced about the government's ambitious plans. Some business groups have warned that the government may be overstating what AI can achieve and emphasized the need for regulators to use these tools responsibly. Ben Bilsland, head of technology at RSM UK, has expressed concerns about overselling AI's capabilities and the potential for looming tax reforms and possible changes to R&D incentives to dampen momentum if not managed carefully.

As global competition intensifies, calls for more coherent AI oversight are growing. Demis Hassabis, chief of Google DeepMind, has previously urged policymakers to focus on "smart regulation" to build public trust. More than a third of firms in the UK cite regulatory compliance as a drag on growth, which could be alleviated by a more streamlined and efficient regulatory process.

Despite these concerns, the UK tech sector is showing signs of strength. The number of new tech firms launched in Q2 2025 increased by 16% compared to the previous year, totaling 14,262. A Barclays survey found that 62% of executives consider the UK a more attractive base for tech firms than Europe, and 60% prefer it to the US.

As the UK positions itself to "overtake America" in key areas of tech, it will be essential to strike a balance between speed and oversight to ensure the UK remains one of the best places in the world to start and grow a tech company. In early 2026, a "regulatory hackathon" is scheduled to bring regulators and AI specialists together to design tools that could speed up approvals and reduce common application errors.

In conclusion, the UK government's AI-focused regulatory reforms aim to boost investment, reduce red tape, and make the UK more attractive to tech firms. While there are concerns about overselling AI's capabilities and the need for proper oversight, the UK tech sector is showing signs of strength, with a significant increase in the number of new tech firms launched in Q2 2025. The upcoming "regulatory hackathon" will be a crucial step in ensuring the UK remains a competitive player in the global tech landscape.

UK lawmaker Peter Kyle proposes modifications to AI regulations for the benefit of domestic enterprises