A new artificial intelligence agency has been established in Scotland to explore the potential of one of the most talked-about technologies in recent years.
The Scottish government expects rapid growth in the sector and projects it could add around £23 billion annually to the national economy by 2035.
Ministers have previously embraced various technological trends, including blockchain and non-fungible tokens (NFTs), which were once heavily promoted by figures such as Rishi Sunak through initiatives like the Royal Mint.
However, artificial intelligence—backed by more than a trillion dollars in investment from major tech companies—appears to represent a far more significant shift.
The government is now considering how AI could reshape public services and the broader economy in Scotland over the coming years, while also addressing the risks and challenges associated with this rapidly evolving technology.
Artificial intelligence tools have developed rapidly in recent years, becoming part of everyday life. Many people now interact with AI multiple times a day—from search engine summaries and smartphone autocorrect to photo editing software and voice transcription features.
AI is also influencing entertainment and lifestyle choices, helping determine what people watch, where they travel, and even how they connect with others. At the same time, governments are increasingly looking to AI as a way to support overstretched public services by improving efficiency, planning, and cost management.
The Scottish government has launched its own agency, AI Scotland, as a “national flagship” to guide strategy and support the growth of local companies. Its five-year plan highlights that several leading AI firms are already based in Scotland, with others choosing to relocate there.
For example, Wordsmith AI is building on Edinburgh’s strong legal tradition by developing tools for contract drafting and review, and was reportedly valued at $100bn within 18 months of launching.
Meanwhile, data companies CoreWeave and DataVita are key partners in a £2.5bn AI computing campus in Lanarkshire, part of a growth zone described as one of the most advanced AI sites globally.
Another firm, AI Pathfinder, is supporting an industrial park project in Irvine, North Ayrshire, which it says could attract up to £15bn in investment.
Significant research in artificial intelligence is also underway in Scotland.
The University of Edinburgh hosts ARCHER2, the UK’s national supercomputer, and is set to open a £750 million supercomputing centre after a period of policy uncertainty that saw the project cancelled and later reinstated.
At Heriot-Watt University, the National Robotarium is driving advancements in medical and offshore robotics, having supported the growth of 14 companies in its early years.
Healthcare is one of the most promising areas for AI in public services. A recent study found that AI tools could improve cancer detection, speed up diagnosis, and reduce the workload on clinical staff.
The research, led by the University of Aberdeen and NHS Grampian, focused on breast cancer screening. In the UK, women aged 50 to 70 are invited for mammograms every three years, with around two million screenings conducted annually.
Currently, two radiologists review each mammogram, and patients are recalled for further tests if needed. Despite this, around 20% of cancers can still be missed.
AI systems trained in image recognition are increasingly being used to analyse scans and detect subtle abnormalities that may be overlooked. In this study, using software called Mia instead of a second radiologist improved detection rates by 10.4%, reduced waiting times from 14 days to three, and cut doctors’ workloads by more than 30%, while still keeping a human radiologist in the loop to review each case.
Another project led by the University of Edinburgh is developing an AI tool that could help opticians detect early signs of dementia by analysing retinal images.
Beyond healthcare, many public bodies are exploring ways to improve administrative efficiency and decision-making using artificial intelligence.
The Scottish government also supports innovation through its regular “CivTech” funding programme, which recently focused on AI-driven solutions. This included investments in tools to help teachers with administrative work, an automated drone-based system to monitor puffin populations, and software designed to detect toxins that could pose cancer risks to firefighters.
Overall, these developments highlight significant opportunities for growth in this rapidly expanding sector.
But not everything about AI is positive—there are growing concerns surrounding its rapid development.
There are ethical questions about how these systems are trained and used, highlighted by controversy over tools like the Grok, which was reportedly used to generate inappropriate edited images without consent.
There are also broader concerns about the future of work and the impact on creative industries, with AI expected to bring major disruption to jobs and entertainment.
The government has acknowledged these challenges, with its strategy placing strong emphasis on “responsible” and “ethical” use of AI. It says it is already working with trade unions to ensure that the technology creates jobs rather than replaces them.
A Future Jobs Panel is also being established to assess AI’s impact on the workforce and to support skills development. Meanwhile, the newly created agency aims to ensure that proper safeguards are in place to prevent unethical use of artificial intelligence.
AI data processing requires vast amounts of energy and can also consume significant quantities of water. In Edinburgh, plans for a new data centre were recently rejected by the city council due to environmental worries. Councillors have since supported a pause on similar projects until clearer guidance is provided on what qualifies as a “green data centre” under planning policy.
However, Scottish ministers believe the country is well positioned to address these challenges thanks to its strong renewable energy potential. In 2024 alone, Scotland generated 38.4 terawatt hours of renewable electricity, with an additional 26.4 gigawatts of onshore and offshore wind and solar projects currently in development. One of the world’s largest offshore wind farms is also being constructed off the east coast.
At the same time, the national grid faces challenges in transporting energy from remote generation sites to population centres in the south. Policymakers suggest that nearby data centres could help utilise this power more efficiently. They also propose that the heat generated by large-scale computing facilities could be reused to supply district heating systems for homes.
Some of these ideas remain forward-looking, but the government argues that action is needed now given the rapid pace of change. As Deputy First Minister Kate Forbes put it, “AI is happening,” and countries must choose whether to benefit from it or be disrupted by it.
The Scottish government aims to ensure the country actively participates in this transformation and makes the most of AI’s potential, rather than simply adapting to global changes.
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