Starmer’s top AI advisor did not declare role at Hakluyt AI investment fund

Exclusive: Concerns that government’s flagship AI policy “could be directed by vested interests”

Prime minister launches the AI Opportunities Action Plan, written by Matt Clifford, last week

Keir Starmer's official advisor on ‘AI opportunities’ did not publicly declare a number of interests in artificial intelligence businesses, including a £40 million investment fund, a Democracy for Sale investigation has found.

Venture capitalist Matt Clifford’s action plan to “turbocharge” AI in the UK was unveiled by Starmer last week.

But while Clifford was writing the AI action plan he was also sitting on the advisory board of Hakluyt Capital, an AI-focused investment spin off from Hakluyt, the advisory firm with close ties to Labour.

Hakluyt Capital was created by Starmer’s business advisor Varun Chandra, who reportedly retains an interest in the fund whose portfolio includes a clutch of AI businesses. Clifford joined the firm’s advisory board last June.

When asked why Hakluyt Capital was never listed in Clifford’s register of interests the Department for Science, Innovation and Technology (DSIT) told this newsletter last week that the tech entrepreneur had left the company. But, as we pointed out, he was still listed on Hakluyt Capital’s website.

Screenshot from Hakluyt Capital’s website taken last week

Hakluyt Capital subsequently told us that Clifford stepped down last week - just as this newsletter started asking questions about potential conflicts of interest.

Sue Hawley, executive director of Spotlight on Corruption said that “it is clearly deeply worrying that this story suggests conflicts of interest management around the government's AI advisor are not being managed effectively.

“Much more robust conflicts of interest management is critical to public confidence in the government's AI strategy going forward, or the public may conclude that it is being directed by those with a vested interest."

When Clifford joined Hakluyt Capital’s advisory board last June the firm, originally set up by ex-MI6 spooks, declared that its “unrivalled network… enables companies to navigate tricky regulatory challenges” and “reach decision-makers at potential customers.”

The following month, Clifford was charged with leading the government’s AI drive. Last week, Starmer appointed him as AI opportunities advisor, accepting all 50 of the recommendations in Clifford’s “action plan”.

Clifford told us that his role at Hakluyt was unpaid and that he did not attend any meetings of the advisory board or provide advice on any AI company.

“I hope that the work I've done on the AI Action Plan is good for the UK and I'm glad to be able to contribute. It's obviously crucial that any actual or perceived conflict of interest is carefully managed and I believe that the mitigations put in place by DSIT achieve that,” Clifford said.

The management of conflicts of interest in government has been described as “woeful” following a recent critical National Audit Office report.

According to the code of conduct, board members of public bodies “as a minimum” must “declare publicly… any private financial or non-financial interests… which may, or may be perceived to, conflict with your public duties.”

We understand that Clifford had informed DSIT about his role at Hakluyt - and other AI interests controlled through his company Entrepreneur First - but the department did not include them in his public register of interests.

DSIT did not respond to our questions about why these interests were omitted from Clifford’s official register but did say that he had “declared all relevant outside interests with the department in full.”

“Arrangements have also been made with the Permanent Secretary to mitigate the risks that these could conflict with his public duties, including the ongoing divestment of financial interests in scope of his duties,” a spokesperson added.

Ian Blackford, a former leader of the Scottish National Party in Westminster and a member of the Committee on Standards in Public Life, told Democracy for Sale that “particularly given people’s concerns about AI, it is really critical that in a situation such as this there is full transparency.”

Blackford said that the department’s decision not to publish all Clifford’s interests was a “failure of government” at a time when “full and effective transparency” around AI policy was needed. “Otherwise you will not have the trust of the public,” he added.

Clifford, 39, led work for Rishi Sunak’s AI Safety Summit, where the former PM famously faced off with Elon Musk. The serial tech investor has also been appointed to the boards of both the government’s AI Safety Institute and its Advanced Research and Invention Agency.

Clifford’s extensive investment portfolio includes direct shareholdings in 43 companies, including Faculty, the AI firm hired by Dominic Cummings to work on the law-breaking Vote Leave campaign for Brexit.

These shareholdings are published in Clifford’s register of interests but other interests, held through Entrepreneur First, the company Clifford co-founded and co-owns, have not been publicly declared.

This includes a stake of about 12 percent in the health-tech firm Accurx, which is held by Entrepreneur First on behalf of Clifford and a group of other investors, financial filings at Companies House show.

Accurx has earned at least £27 million in four years by selling digital messaging and appointment booking software to the NHS. Clifford stressed that he had never been involved with any aspect of health or NHS policy that has touched on Accurx's work.

According to Clifford’s LinkedIn profile, the “companies built at EF (Entrepreneur First) are now worth over $11 billion” (£9 billion).

We understand DSIT did not publish details of Entrepreneur First’s investments because the information was commercially sensitive. The department did not respond to questions on how it balanced this decision against the need for transparency.

Concerns have been raised about the potential for conflicts of interest as part of Britain’s AI ‘goldrush’. As the latest Private Eye pointed out, investment minister Poppy Gustafson led cybersecurity company Darktrace, which “brings its AI to your data”, before becoming an peer last year.

Last year the government was forced to publish a declaration of interests for Tory donor Simon Blagden, who headed BuildingDigital UK, following revelations in this newsletter.

*This story is amended on Jan 26 to state that Poppy Gustafson is in the House of Lords, not an MP as previously stated.