Between Jan 2018 and the end of July 2025 the UK public sector awarded 1,309 AI contracts, worth in total £3.45 billion.
The date comes from Tussell’s AI Procurement Tracker, which draws on data from our own market intelligence platform to map the landscape of AI adoption across government.
Between June and July 2025, 35 new AI-tagged contracts were awarded, worth £88 million. Notable contracts include National Highways, which contracted Deloitte for £35 million as part of its ‘Chief Data Office’. This includes “growing new capability that improves impact, e.g. in AI.”
The largest buyer of AI by contract value since 2018 – by a mile – was the Met Office. The supercomputer contract awarded to Microsoft is worth £1.03 billion over a ten-year period. Unsurprisingly, Microsoft was the largest supplier of AI by contract value since 2018, followed by Palantir and Init.
However, Tussell contends that “the amount of money spent so far on AI is big, but not as big as the hype surrounding gen AI would suggest. £3.45 billion sounds like a lot but remember: just under a third of this stems from a single £1 billion contract.
“But even when taken at face value, £3.45 billion still only accounts for roughly 2.5 percent of the total value of all IT services and software contracts awarded by the public sector over the Jan 2018 – Dec 2024 period (£134 billion).
“In other words, the AI Procurement Tracker seems to show that there is a lot of excitement around AI, but it hasn’t filtered into public procurement in a meaningful way – yet!”
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Key gen AI contracts in public sector
Tussell also highlighted some key contracts from categories that fall under Generative (gen AI).
- Image Recognition: Department of Health and Social Care has enlisted the help of Kheiron Medical Technologies to undertake the Mia Real World Testing programme, this will use AI to identify breast cancer in women that was missed by human doctors.
- Automation: DWP is working with UiPath to automate front and back end tasks, the contract is worth nearly £10 million over a three year period.
- Machine Learning: The BBC is using machine learning to improve its subtitling and audio descriptions; Red Bee Media won the nearly £30 million in 2018.
- Natural Language Processing (NLP): The Department for Education has created a chatbot with the help of Inform Communications for its National Careers Service, the contract is worth just less than £1 million.
- Data Analysis: The Police & Crime Commissioner for Northamptonshire has awarded a £20mn contract to CDS Support to use AI to help examine evidence and provide analysis.
- Research into AI: The University of Bristol has awarded HPE a £176 million contract to create Isambard AI, this will look into AI safety and aims to establish the UK in a position of leadership in terms of AI.
Joe Hill, policy director at think tank Re:State (formerly Reform) noted many contracts have been awarded to non-specialist firms, large digital companies and systems integrators.
“This shows the government has begun its AI adoption journey, and that it’s largely buying technical support rather than buying software directly,” he said.
Hill said we’ll “see a growth in AI-related procurement, and probably a shift from procuring external support to building bespoke solutions, to buying off-the-shelf software and using open-source products.”
“Artificial intelligence spend is only going to increase over the next months and years,” added Sean Williams, founder and CEO of AutogenAI.
“Generative AI is a paradigm shifting general purpose technology – like the printing press, electricity or the internet. We are in the equivalent of 1995 for the internet with generative AI. Over the next decade it will transform entire tranches of government, business and society.
“This report shows the first stirrings of the change that is coming.”
