The UK says it will establish a national AI Biosecurity Lab (AIBL) to help strengthen its defences against emerging biological threats.
As part of Wednesday's Budget, the government will commit £100m to establishing the new, "world first" institute with the support of leading AI firms.
The chancellor will also pledge millions of pounds in spending across a range of initiatives aimed at shoring up the UK's ability to respond to evolving cyber, biological and AI-enabled threats.
"AI will transform daily life: every firm, community, hospital, school, and every aspect of our economy can benefit," John Healey said.
"I understand and share the concerns of working people, so I am setting out a distinctively British approach to AI.
"One that doesn't leave workers behind and defends our national interest, while ensuring the benefits of AI-enabled growth are felt right across the country."
The full details about the role and remit of the new lab are yet to emerge.
But the AI Minister Kanishka Narayan said it would be a "major new global institution" that brings together "world-leading scientific expertise" to ensure the UK can safeguard its citizens and goals as AI develops.
"That means staying ahead of emerging threats, from cyber attacks to biological risks, while building more of the critical technology our security depends on," he said.
"By backing British science, advanced chips and our own AI companies, we can strengthen our national security, rebuild Britain's industrial strength and create good, skilled jobs across the country."
The AI Biosecurity Lab's creation will also be supported by leading AI developers, with OpenAI and Anthropic providing £200m worth of AI model credits that can be spent on the use of their models.
The Chancellor's plans to boost AI spending will also see an additional £120m committed to the UK's AI Security Institute (AISI).
Established by the former Conservative government in 2023, the lab evaluates the risks of the most advanced and powerful models - and has been championed for its role in helping build a collaborative and open approach to AI testing.
The additional funding announced by the Chancellor will aim to help ensure the lab can continue its efforts and work, particularly amid growing calls for technical standards and guardrails for AI development.
It will come alongside a £60m investment in what it coined a "National Cyber Shield" which it said would use agentic AI to boost cyber-defences, and £70m funding towards a National Exposure and Real-Time Vulnerability (NERV) Centre.
This, it said, would harness AI tools to detect cyber vulnerabilities across the UK's critical infrastructure and economy.
It comes after the UK government revealed it was among organisations around the world to have taken some sites offline as a precaution after critical flaws were surfaced in a popular programming language.
Researchers who helped surface the vulnerabilities in PHP - a popular server-side scripting language used in web development for decades - warned platforms which use it could be exposed to potential hacks.
There have been no reports of any successful exploits of the flaw, coined php2shell, so far.
But experts have warned that the incident shows how quickly and easily bugs which have lain long dormant may be surfaced - and potentially exploited - using AI.