Healey framed the spending as the biggest ever investment to guard against cyber risks and the disruptive potential of AI, at what he called a fork in the road between existential threats and transformative economic potential. "AI will transform daily life: every firm, community, hospital, school and every aspect of our economy can benefit," he said, adding that the approach would not "leave workers behind".

The Treasury also said it would back up to £300m in public-private investment in a new AI Biosecurity Lab, intended to bring together scientific expertise against emerging biological threats, and spend £10m a year on understanding how AI will reshape jobs and industry.

The pledge comes amid visible signs of both disruption and dependence. Barclays is cutting 5,000 jobs as part of cost-saving plans that bosses linked to efficiency gains from rolling out AI across the bank, and websites around the world went dark this week after a serious vulnerability was found in a computer language used to build much of the web, a development the report links to rapid AI advances.

Healey said the investments would nurture homegrown businesses and talent to cut Britain's dependency on other countries also making strides in AI. The budget lands against a turbulent backdrop, with the war in the Middle East pushing up energy costs and oil briefly topping $117 a barrel on Friday, its highest level in six months.