Chancellor John Healey has unveiled his first Autumn Budget in the House of Commons.
This is also the first budget under Andy Burnham.
In his speech, the Chancellor said that Government must 'seize opportunities and guard against risks' of AI.
He set out a new plan for data centres and said that when the NHS and armed forces use AI, the data should be here.
The British data centre covenant will have "strict tests that data centres must meet".
British people should be able to benefit from AI that is "secure, safe and working for the British people".
The Chancellor highlighted a digital overhaul of government, with investment in AI.
AI will be used for Civil Service transformation to save a further £600 million from back office budgets.
He also announced a review of NHS productivity and AI "so staff can spend their time with patients, not on admin".