The UK Government’s latest Budget triggered a wave of responses from leaders across the country’s technology, cybersecurity, and startup communities.

Yesterday (Nov. 26), Rachel Reeves, Chancellor of the Exchequer, outlined the Autumn Budget. For the tech sector it was heavily framed around AI, productivity, and long-term economic stability.

While many welcome fresh commitments to AI infrastructure and innovation, others warn that limited investment, taxation changes, and a lack of cyber resilience funding risk undermining national ambitions.

Deeptech welcomes AI investment

Catherine Lenson, Chief Operating Officer of Phoenix Court, home to LocalGlobe, said the Budget reinforced some of the right priorities for Britain’s deeptech economy.

“Unleashing the UK’s strength in deeptech comes from world-class science being translated into real products — from quantum and photonics to advanced materials and synthetic biology. But those companies need more than early R&D support. They need customers, compute and long-term commitments. We’re pleased to see the Government focus on AI infrastructure, a new AI for Science Strategy published a few days ago, and a £100m advanced market commitment for UK AI hardware. Delivering on these commitments will give deeptech founders the confidence to build here, scale here, and turn scientific breakthroughs into global businesses.”

Lenson’s comments reflect a growing sense that, while the UK has world-leading research institutions, its ability to convert scientific advances into globally competitive businesses depends on industrial-scale compute power, patient capital, and predictable policy. The Budget’s commitments represent progress, but sector leaders argue that follow-through will be critical.

AI readiness depends on data foundations

Bernadette Wightman, UK & Ireland CEO at Iron Mountain, highlighted an urgent but less visible challenge: preparing the UK’s vast stores of unstructured data for AI deployment.

“With billions of pounds of investment announced for AI across the UK, there is now an even greater need to ensure that all UK unstructured data is AI-ready… This requires making the necessary infrastructure investments, honing skills, and creating strong governance structures.”

She warned that gaps in data lifecycle management could obstruct progress:

“While it’s encouraging to see AI taking centre stage, we must not overlook the foundations needed for responsible adoption… If the UK is to unlock AI’s potential and protect sensitive information, organisations need to prioritise investing in making their unstructured data AI-ready and ensure robust processes are in place to securely shift away from managing and disposing of legacy technology.”

Industry analysts note that without standards for data quality, retention, and deletion — especially for high-risk sectors — AI adoption may introduce new liabilities.

Startups need capital, skills, and stability

Steven Drost, Co-Founder and Executive Vice Chairman of CodeBase, said the Budget recognised the importance of founders and scaleups, but emphasised how much depends on sustained ecosystem support.

“Chancellor’s Reeve’s expressed support and commitment to founders — and, crucially, to scaleups — is what the country needs to drive our economy forward… The startup ecosystem is a mycelial network — a system where talent, ideas, and investment move through invisible connections. When those connections are strong, whole regions thrive.”

Drost pointed to Scotland’s Techscaler programme as a model for national scaling success, suggesting the Budget must now back similar networks elsewhere.

He also noted that founders need more than capital: stable schemes such as EIS and SEIS, accessible talent pipelines, and clear frameworks for responsible AI deployment are essential to sustaining high-growth companies.

Legal views

James Clark, Partner at Spencer West LLP, offered a mixed verdict on the Budget’s tech agenda.

“There are definitely nuggets in there to cheer tech enthusiasts… However, the scale of investment is necessarily constrained by the wider pressures on the public purse.”

He noted that each new AI Growth Zone will receive just £5 million — “relatively modest” compared to multi-billion-dollar AI industrial strategies in the US, China, and the EU.

Clark also highlighted tax changes that may dampen founder incentives:

“…there is some bad news, including the increased rate of tax on dividend income, the decrease in CGT relief on qualifying disposals to Employee Ownership Trusts… and the hike in the CGT rate for business owners selling their business.”

Industry observers say these measures could influence decisions about where to found or exit a business, potentially impacting the UK’s competitiveness.

Warnings from cybersecurity sector

Several leaders in cybersecurity sharply criticised the absence of dedicated cyber resilience measures in the Budget — particularly as high-profile incidents increasingly affect national economic performance.

Dominic Carroll, Director of Portfolio at e2e-assure, argued for urgent Government intervention:

“If the UK wants growth, it must fund resilience. Cyberattacks are now economic events – JLR [Jaguar Land Rover] and M&S proved that.”

He added:

“The Government must treat cyber resilience as economic infrastructure… Targeted incentives for 24/7 threat detection and response would protect growth where it matters most.”

Carroll said businesses cannot remain globally competitive if supply-chain-disrupting attacks continue to be absorbed individually rather than systemically.

Edward Lewis, CEO of CyXcel, issued one of the starkest warnings, arguing that the Budget underestimates the financial shockwaves of modern cyberattacks.

“The tax hike in today’s budget, overall, extracts more from businesses while providing little room for companies to invest in their own resilience… Increased tax costs don’t just reduce investment capacity, they eliminate the financial cushion businesses need when ransomware and other cyber threats strike.”

He cited JLR’s ransomware incident as a case study in systemic economic impact:

“Take JLR’s recent ransomware incident as an example… for every £1 spent responding to the attack, they needed £18 in emergency financing to prevent collapse… The Bank of England explicitly cited this incident as dragging down Q3 GDP growth.”

Lewis argued that without national-level financial mechanisms to absorb these shocks, mid-sized firms could face extinction after major incidents — potentially harming GDP more severely than taxation changes are likely to help.

Chris Newton-Smith, CEO of IO, said the lack of cybersecurity investment creates significant risk at a time when national infrastructure is increasingly targeted.

“The lack of acknowledgement, and dedicated cybersecurity funding, in today’s Budget is likely to place more pressure on organisations to self-fund risk management… This will have a severe impact on the security of our critical national infrastructure providers.”

He also warned that rapid AI deployment without sufficient governance could create new vulnerabilities that the state is not currently equipped to support.

Newton-Smith welcomed measures on AI and skills but stressed that the policy mix must evolve alongside new regulatory regimes such as NIS2 and the upcoming Cyber Security and Resilience Bill.

Conclusion

Across the tech and cyber sectors, reactions to the Budget share a common theme: while the Government is clearly signalling its commitment to AI-driven growth, many of the foundational elements — long-term capital, cyber resilience, data infrastructure, and competitive tax structures — remain underpowered.

Leaders broadly agree that the UK’s ambitions are achievable, but only if the country matches its innovation agenda with stronger investment, clearer governance, and a more robust economic safety net for a digital-first economy.

Cybersecurity was in the news again. Three London councils have activated emergency response plans after a cyberattack hit their shared IT systems.