A new agreement between the UK Ministry of Justice and OpenAI will change the way UK businesses deploy artificial intelligence.
The agreement, announced by Deputy Prime Minister David Lammy at OpenAI’s Frontiers Conference, will allow OpenAI’s business customers to host their data on servers located in the UK for the first time, strengthening data sovereignty and providing businesses with further assurance about where sensitive information is stored.
This partnership addresses privacy, compliance, and resiliency concerns that are barriers to widespread AI adoption by enabling in-country data hosting.
The move is aimed at increasing confidence among businesses considering AI tools and attracting new investment in UK technology and services.
Deputy Prime Minister Lamy commented on the agreement as follows: “Thanks to new AI tools, our best probation officers are able to spend significantly less time on paperwork and more time face-to-face with offenders, reducing the likelihood of them reoffending.
“Our partnership with OpenAI places the UK firmly in the driver’s seat of a global technology revolution, leading the world in innovation and leveraging technology to deliver equity and opportunity to every corner of the UK.”
Practical reforms to accelerate AI adoption in government services
The Ministry of Justice (MoJ) has already begun rolling out practical AI-driven changes within its services.
More than 1,000 probation officers will have access to Justice Transcribe, an in-house AI system that records and transcribes conversations with offenders.
Automation of manual transcription is expected to free up significant staff time. The Department estimates potential savings measured in hundreds of thousands of business days. This allows front-line workers to prioritize supervision and rehabilitation activities.
These deployments are part of a wider program aimed at demonstrating how AI can streamline public services.
Similar transcription techniques are used in parts of the NHS to reduce administrative burden, speed up the patient discharge process and reduce pressure on clinical staff.
Sam Altman, CEO of OpenAI, added: “The number of people using our products in the UK has quadrupled in the past year. It’s great to see them using AI to save time, be more productive and get more done.”
“Civil servants are using ChatGPT to improve public services and established businesses are rethinking their operations. We are proud to continue to support the UK and the government’s AI plans.”
National Strategy: Labs, Zones, and Skills for Widespread AI Deployment
The government is supporting a series of initiatives aimed at expanding the adoption of AI across the economy.
The AI Growth Lab provides a sandbox environment where regulators and companies can test the interaction of rules and innovation, reducing friction for responsible AI adoption.
Complementing the Institute, AI Growth Zones are being established across the region to attract private capital, create high-skilled jobs, and foster local economic revitalization.
Employee preparation is a central plank of your strategy. The government is working with industry to ensure that around a fifth of the UK workforce, or 7.5 million people, will improve their AI skills by 2030, enabling employees to use AI tools effectively in their daily work.
Sector-specific champions are appointed in areas such as life sciences and financial services to support customized implementations and maximize productivity gains.
Building Capability: Stargate UK and GPU Deployment
Investment in core infrastructure is also progressing in parallel. Previous plans are moving forward involving OpenAI, NVIDIA and British company NScale to build a sovereign AI platform called Stargate UK.
Phase 1 of the build will introduce up to 8,000 NVIDIA GPUs early next year, expanding to approximately 31,000 GPUs over time.
These resources will be spread across multiple sites across the UK, including the Cobalt Park facility, which is part of the newly designated AI Growth Zone in the North East.
By combining localized infrastructure and in-country data hosting, we aim to create an ecosystem where businesses can experiment with, scale, and secure AI solutions without having to transfer sensitive data overseas.
Economic scale and potential productivity gains
Deploying AI at scale offers great economic promise. According to independent estimates, the introduction of AI could increase productivity growth in the UK by 0.4 to 1.3 percentage points, contributing tens of billions of dollars a year to national output by 2030.
Policymakers see the Justice Department’s agreement with OpenAI as one of the practical steps to reduce regulatory friction and realize productivity gains by alleviating data security concerns.
What this means for UK businesses
For companies looking to invest in AI, the package, which combines in-country data hosting, regional growth zones, infrastructure construction, and employee training, aims to lower some key barriers to AI adoption.
The strategy combines immediate operational benefits, such as administrative time savings in public services, with long-term goals to attract private investment and develop indigenous AI capabilities.
Together, these measures aim to strengthen the UK’s ability to manage and govern powerful AI tools at home, while supporting both private sector innovation and public sector reform, and building momentum for AI adoption across industries.
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