The UK scraps $1.7 billion worth of AI projects, dealing a blow to its global aspirations in the field.

• The UK government spokesperson confirmed to CNBC that two significant taxpayer-funded spending commitments, valued at £500 million and £800 million, respectively, are being cancelled.
• The creation of a next-generation exascale computer, capable of performing 1 trillion calculations a second, at the University of Edinburgh would have been funded by one of the canceled pledges.
• The U.K. would have enhanced its capacity to construct high-performance infrastructure that can handle advanced AI models, which require significant power consumption and vast amounts of training data.

The UK government has scrapped £1.3 billion ($1.7 billion) of AI computing projects, dealing a major blow to the country's efforts to become a global AI leader.

The government has decided to drop two major taxpayer-funded spending commitments worth £500 million and £800 million, respectively, in order to prioritize other fiscal plans.

The £500 million pledge made by Rishi Sunak's government last year was intended for the AI Research Resource, a development initiative aimed at enhancing the U.K.'s compute infrastructure.

The £800 million commitment, announced last year, would have funded the creation of a next-generation exascale computer at the University of Edinburgh, capable of performing 1 trillion calculations a second.

The U.K. could have enhanced its capacity to construct high-performance infrastructure for running advanced AI models, which require significant power consumption and vast amounts of training data, through these initiatives.

The Labour government, after being newly elected, stated that neither of these promises will be implemented at present.

The U.K.'s Department for Science, Innovation and Technology (DSIT) is fully dedicated to constructing technology infrastructure that provides growth and prospects for individuals throughout the U.K., as stated by a spokesperson via email to CNBC.

The government is making tough spending choices across all departments due to billions of pounds of unfulfilled promises.

The DSIT spokesperson stated that this is crucial for achieving economic stability and fulfilling our national growth objectives.

The government recently unveiled an AI Opportunities Action Plan aimed at improving the U.K.'s computing infrastructure to better serve its needs and explore how AI and other emerging technologies can best support Britain's industrial strategy.

This week, British Finance Minister Rachel Reeves announced spending cuts after inheriting £22 billion ($28 billion) of unfunded pledges from the center-right Conservatives.

The government under Sunak's leadership prioritized leading in AI and hosted a global AI safety summit at Bletchley Park, the former home of World War II codebreakers who helped Britain defeat Nazi Germany.

In contrast to his predecessor, Prime Minister Keir Starmer's government is considering introducing new statutory regulations for the AI industry.

The U.K. AI Bill was not announced by the Labour government in a speech delivered by King Charles III last month, as widely expected. Instead, a DSIT spokesperson informed CNBC that the government would consult on plans to regulate AI in the future.