A new agreement between the UK’s Ministry of Justice and OpenAI is set to change how British companies adopt artificial intelligence.
Announced by Deputy Prime Minister David Lammy at OpenAI’s Frontiers Conference, the arrangement will allow OpenAI’s business customers to host their data on servers located in the UK for the first time, strengthening data sovereignty and offering businesses greater assurance about where sensitive information is stored.
By enabling domestic data hosting, the partnership addresses privacy, compliance, and resilience concerns that have been barriers to broader AI adoption.
The move is intended to increase confidence among firms considering AI tools and to attract fresh investment into British tech and services.
Commenting on the deal, Deputy PM Lammy said: “New AI tools are already allowing our brilliant probation officers to spend far less time filling out paperwork and far more time face to face with offenders, making them less likely to reoffend.
“Our partnership with OpenAI places Britain firmly in the driving seat of the global tech revolution – leading the world in innovation and using technology to deliver fairness and opportunity for every corner of the UK.”
Practical reforms to speed AI adoption in government services
The Ministry of Justice (MoJ) has already begun to roll out practical AI-led changes within its services.
More than 1,000 probation officers will gain access to Justice Transcribe, an internal AI system that records and transcribes conversations with offenders.
Automating manual transcription is expected to free up significant staff time – the Ministry estimates potential savings measured in hundreds of thousands of working days – allowing frontline workers to prioritise supervision and rehabilitation activities.
These deployments are part of a wider programme intended to demonstrate how AI can make public services more efficient.
Similar transcription technologies are being used in parts of the NHS to reduce administrative burdens, speed patient discharge processes, and ease pressure on clinical staff.
Sam Altman, CEO of OpenAI, added: “The number of people using our products in the UK has increased fourfold in the past year. It’s exciting to see them using AI to save time, increase productivity, and get more done.
“Civil servants are using ChatGPT to improve public services, and established firms are reimagining operations. We’re proud to continue supporting the UK and the government’s AI plan.”
National strategy: Labs, zones, and skills for widespread AI adoption
The government is backing a suite of initiatives aimed at scaling AI adoption across the economy.
An AI Growth Lab will provide a sandbox environment where regulators and businesses can test how rules interact with innovation, reducing friction for responsible AI deployment.
Complementing the lab, AI Growth Zones are being established across regions to attract private capital, create high-skilled jobs, and stimulate local economic regeneration.
Workforce readiness is a central plank of the strategy. The government is collaborating with industry to upskill 7.5 million people in AI by 2030 – roughly one fifth of the UK workforce – so employees can use AI tools effectively in day-to-day roles.
Sector-specific champions will be appointed in areas such as life sciences and financial services to support tailored adoption and maximise productivity gains.
Building capacity: Stargate UK and GPU deployments
Investment in core infrastructure is progressing in parallel. Earlier plans involving OpenAI, NVIDIA and UK firm NScale to create a sovereign AI platform called Stargate UK are advancing.
Phase one of the build will see up to 8,000 NVIDIA GPUs deployed early next year, with scope to expand to around 31,000 GPUs over time.
These resources will be distributed across multiple UK sites, including facilities in Cobalt Park, which has been included in a newly designated AI Growth Zone in the North East.
Localised infrastructure combined with domestic data hosting is intended to create an ecosystem where companies can trial, scale, and secure AI solutions without transferring sensitive data overseas.
Economic scale and potential productivity gains
Adopting AI at scale carries substantial economic promise. Independent estimates suggest that AI adoption could add between 0.4 and 1.3 percentage points to the UK’s productivity growth, potentially contributing the equivalent of tens of billions annually to national output by 2030.
Policymakers are positioning the MoJ–OpenAI agreement as one practical step toward unlocking those productivity gains by reducing regulatory friction and mitigating data-security concerns.
What this means for British businesses
For companies weighing AI investments, the combined package – domestic data hosting, regional growth zones, infrastructure builds, and workforce training – aims to lower several of the key barriers to AI adoption.
The strategy links immediate operational benefits, such as administrative time savings in public services, with longer-term ambitions to attract private investment and cultivate home-grown AI capability.
Taken together, these measures are intended to create momentum for AI adoption across industries, supporting both private-sector innovation and public-sector reform while reinforcing the UK’s capacity to manage and govern powerful AI tools on its own soil.
