Freshwater Strategy’s UK Country Manager, Matthew Lesh, has published a new policy brief with Onward examining how outdated copyright laws threaten to derail the UK’s AI ambitions.

Despite ranking third globally in AI development, the UK faces a critical policy challenge: unclear copyright rules around AI training are driving innovation offshore. Even British companies like Stability AI train their models entirely outside the UK, choosing jurisdictions with clearer legal frameworks.

The problem is straightforward. AI models learn by analysing patterns in large datasets, however, they don’t store or reproduce training data verbatim. This is analogous to human learning: we read, absorb, and create new work inspired by what we’ve learned. Yet currently, UK law lacks a clear commercial exemption for this “text and data mining,” creating legal uncertainty that deters domestic AI development.

For the full analysis, including detailed policy recommendations and international comparisons, download the PDF below.