Tech secretary Liz Kendall said in a speech that the UK must act now to cement its place in the new technological era.

Kendall said there must be a “decisive move” towards backing more British tech companies as AI reshapes global power, security and prosperity.

Speaking at the Royal United Services Institute (RUSI), she warned that nations which fail to master the defining technology of their age risk ceding control over their security and economic future.

She said history shows that the countries which pull ahead are those that master the defining currency of their age – from navies and railways to power grids.

Today, that currency is technology: chips, computing power and artificial intelligence, which are increasingly becoming engines of both economic power and hard power.

The Tech Secretary noted that 70 per cent of global AI compute is now controlled by just 5 companies.

Control over where AI systems are built, how they operate and who ultimately controls them is now fundamental to economic security, energy security and defence security.

“This government believes AI Sovereignty is not about isolationism or attempting to pull up the drawbridge and go it alone,” Kendall said.

“We will continue to use the best technology and welcome inward investment because that’s what our public services and economy demand.

“For Britain, AI sovereignty is about reducing over dependencies and increasing resilience in key national strategic priorities, as the Prime Minister has rightly argued.

“So we secure greater control and greater leverage over the issues that matter most.

“And if you want leverage for your country, you need to be a keystone in the global tech architecture – an indispensable partner. This requires 2 key shifts in our approach.

“First, a decisive move towards backing more British AI companies, especially in areas where we have real strengths.

“And second, by working more closely with our international partners, particularly other so-called middle power nations, including on setting the standards for how AI deployed.”

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The Technology Secretary rejected calls to pause the development of artificial intelligence, describing such a move as “a double betrayal” of British talent and British interests. Warning that retreating from progress would mean retreating from the world, the minister argued that the real choice facing the country is not between a world with AI and one without, but between a Britain that shapes its own AI future and one left at its mercy.

The speech comes as the UK’s New Sovereign AI Unit announced its investment in Ineffable AI, a UK AI firm which gained £814m in seed funding, the largest European seed round in history.