Britain must seize the initiative in AI or be left at the “mercy and whim” of a future shaped by the technology, Liz Kendall has warned.

The UK’s technology secretary said the country must have greater control over the industry as she highlighted big tech’s grip over its development, with 70% of the world’s artificial intelligence computing power provided by US companies.

In a speech on the UK’s ability to develop its own capabilities, Kendall said: “The choice isn’t between a world that has AI and one that does not. It is a choice between a world where we shape our AI future, based on our own interests and values, or where we are left at its mercy and whim.”

Kendall highlighted the launch this month of a state AI investment fund as evidence of Labour’s support for domestic firms, and revealed the government was drawing up a plan to become more influential in designing and manufacturing the chips that power AI systems.

The MP for Leicester West spoke amid concerns the UK was struggling to make its own way in the technology, despite producing a stream of academic talent and being the base for companies such as UK-founded Google DeepMind. Last week Nick Clegg, the former deputy prime minister and, until recently, a senior Silicon Valley executive, said the UK was “without a single steam engine” in the AI revolution due to factors like high energy costs and an unresolved row over copyright.

OpenAI, the US startup behind ChatGPT, has paused a multi-billion dollar datacentre project in the UK, citing citing high energy costs and regulation. It came after the Guardian revealed many of the deals to “mainline AI into the veins” of the British economy were “phantom investments”, and a supercomputer scheduled to go live in 2026 was still a scaffolding yard in Essex.

Kendall singled out datacentres as an example of concentration in the AI market, with five US companies – Amazon, Google, Meta, Microsoft, and Oracle – controlling 70% of global AI compute, up from 60% a year ago.

“Control of this incredibly powerful technology is becoming increasingly concentrated,” she said, adding that the UK “must shape this technology, not just be shaped by it”.

However, Kendall said a push for AI sovereignty should not be seen as “weakening our deep, close and enduring relationship with the US”, the home of leading AI companies such as OpenAI and Anthropic.

Kendall said calls to pause AI development would be a “betrayal of British talent and British interests”. In December MPs at a Westminster Hall debate were urged to consider calls by campaign group PauseAI for a hiatus in developing powerful AI systems.

“It would send a message that Britain is closed to new ideas and new opportunities. That a country so rich in talent, innovation and enterprise has put an ‘out of office’ sign on its front door,” said Kendall.

“If we retreat from progress we retreat from the world, leaving this powerful technology to be exploited by other nations to their advantage and our disadvantage.”