AI Champions: Frontier AI Phase 1

Overview

Innovate UK is investing at least £3 million to support ambitious Frontier AI projects led by UK SMEs.

This competition is designed to accelerate the development of state-of-the-art artificial intelligence and machine learning technologies that deliver genuine step-change improvements in capability. The focus is on innovations that move beyond incremental gains and instead unlock new products, platforms or services, or achieve leading performance against recognised benchmarks.

Within this programme, Frontier AI refers to systems that demonstrate world-leading performance or genuinely new-to-the-world capability. The advance must be driven by innovation in model or system architecture, training methodology, or core control and learning algorithms. The expectation is clear: strong scientific grounding, credible engineering breakthroughs and a realistic pathway to scale.

Phase 1 is the first stage of a three-phase, stage-gated pipeline intended to develop the next generation of UK AI champions. At this stage, the objective is to de-risk the core technology and validate technical feasibility. Projects must generate robust, defensible evidence that the proposed approach works in practice and has the potential to scale commercially.

Successful projects will need to demonstrate meaningful technical progress. This may include proving a concept for a new architecture or subsystem, validating system capability, achieving frontier-level performance, evidencing scalability in both architecture and business model, and presenting a credible strategy for accessing high-quality data and sufficient compute infrastructure. Clear thinking around data access and quantified compute requirements will be essential.

At the end of Phase 1, businesses must submit a technical whitepaper outlining what has been built, what has been proven and how performance has been measured against predefined success criteria. This must also set out remaining technical risks, the defensibility of the innovation, readiness for Phase 2 and the commercial assumptions underpinning future scale-up.

Only successful Phase 1 applicants will be invited to apply for Phase 2, subject to a separate competition launch and formal business case approval. Phase 2 is expected to support demonstrator projects of up to 12 months, with project costs of up to £1 million, and should advance the technology readiness level by two points. Funding for later phases remains subject to approval by the Department for Science, Innovation and Technology and HM Treasury.

Scope

The aim of this competition is to advance the development of state-of-the-art artificial intelligence (AI) and machine learning (ML) in the UK. Innovate UK will fund UK SMEs to validate the technical feasibility of ambitious AI and ML innovations that could deliver step-change improvements in capability and enable new products, services or platforms.

Within this competition series, Innovate UK defines Frontier AI as AI and ML systems that achieve state-of-the-art performance against recognised benchmarks or demonstrate genuinely new-to-the-world capability in a clearly specified area. The advance must be attributable to innovation in model or system architecture, training methodology, or core control and learning algorithms.

Projects must focus on novel AI and ML technology and methodology development and validate the objectives of Phase 1 with clear, predefined metrics.

Innovate UK is seeking applications with a credible route to defensibility, such as protectable intellectual property, proprietary data advantage, specialist know-how or other meaningful barriers to entry, alongside a realistic pathway to scale.

Projects must start at Technology Readiness Level 3 or below at the point of application.

The technology must, in principle, be capable of scaling at pace. However, projects are not required to prove or validate scalability during Phase 1.

Projects must demonstrate that the technology works in principle. This may involve validating a critical component or core architecture, and synthetic or simulated data can be used where appropriate. Applications must clearly explain how state-of-the-art performance will be achieved where capability already exists, or how genuinely new-to-the-world capability will be delivered where the innovation is novel.

Funding will be reserved for projects where AI represents the core technical contribution and the main source of operational advantage.

For Phase 1, proposals must deliver a proof-of-concept prototype of the whole stack, core architecture or critical subsystem component; a clear validation methodology against predefined metrics; evidence of technical novelty; a scaling rationale for both the technology and business model; and a technical white paper.

To be in scope, projects must clearly describe the serviceable market and target customers, background intellectual property and route to defensibility, technical novelty supported by benchmarked validation, and at least one key uncertainty that will be resolved during Phase 1.

Key themes and topics

Specific themes

Projects must align with one or more of the defined themes and focus on a specific priority within each selected theme. Applications that do not clearly align with both the theme and its stated priority will not be assessed.

Theme 1: AI-enabled health and life sciences
This theme supports the ambition to make the UK the best place to develop and deploy AI for drug discovery, medicines development and manufacturing, clinical trials and healthcare delivery. Projects must focus on one priority area: predictive healthcare, medicines discovery, medicines manufacturing optimisation, or genomics and multi-omics.

Theme 2: Advanced materials with AI
This theme aims to build a world-leading, AI-first materials R&D capability, including applications in aerospace, net zero technologies, defence and semiconductors. Projects must focus on one priority area: material prediction, generative models and multi-objective optimisation; physics-ML models for discovery and simulation acceleration; or multimodal knowledge discovery platforms.

Theme 3: Secure AI for national security and defence
This theme supports the UK defence sector in becoming a leading integrator of secure AI-enhanced command and control and AI-enabled sensor systems. Projects must focus on one priority area: AI-driven assured multi-source fusion and analytics for distributed heterogeneous information and multimodal decision-support systems; edge autonomy and robust decision and control AI systems, including low-swap inference, quantum-AI and semiconductor-AI for novel underwater sensors; or secure and robust AI, including ML-driven signal processing and AI for acoustic signal processing and digital electronic warfare.

UKRI is committed to maximising the contribution that intellectual and knowledge assets, including intellectual property, arising from funded research and innovation can make to national security and defence, including through dual-use applications. Applicants should refer to UKRI’s published guidance on national security and defence research.

Theme 4: Fundamental AI
This theme focuses on advancing foundational AI capabilities that can underpin multiple sectors and future applications. Projects must focus on one priority area: abstract reasoning and generalisation; novel AI and ML architectures and methodologies, including online learning and world model learning systems; or generalisable explainable AI.

Project duration

Projects must:

• last between 3 to 6 months
• start by 1st August 2026
• end 31st January 2027

Award value

Projects must have total costs between £150,000 and £250,000

Funding rates

For feasibility studies, which evaluates a project’s potential by uncovering key factors and informing confident, well-founded decisions about moving forward, you can get funding for your eligible project costs of:

• up to 70% if you are a micro or small organisation
• up to 60% if you are a medium sized organisation
• up to 50% if you are a large organisation

For industrial research projects, purposeful research that builds new knowledge and skills to improve or develop products, processes, or services—often through prototypes or system components that validate ideas in realistic settings, you can get funding for your eligible project costs of:

• up to 70% if you are a micro or small organisation
• up to 60% if you are a medium sized organisation
• up to 50% if you are a large organisation

Research organisations can share up to 50% of the total eligible project costs

Eligibility criteria

·      Projects must be led by a UK registered business of any size

·      Projects must include at least one grant claiming SME

·      Collaborators can be a UK registered business of any size; an academic institution; a charity; a not for profit; a public sector organisation; or a research and technology organisation (RTO)

• Subcontractors are not allowed in this competition.
• All funded project work must be carried out within the UK
• intend to exploit the results from or in the UK

·      Subsidy control and state aid rules apply