“Innovate UK Smart Grants” is one of the most-searched UK funding terms — but in 2026 the most important fact about them is their status. Here’s what they are, how they work, and why you may need a Plan B right now. Cited to UKRI. (dgm implements osFoundry as an independent partner; we are not a grant-writing service.)

What Smart Grants are

Smart Grants are Innovate UK’s flagship open, sector-agnostic competition — funding “game-changing”, commercially viable R&D innovation from any part of the economy. Innovate UK is the UK’s national innovation agency, part of UKRI. Because the competition is sector-agnostic, AI and software R&D can qualify — provided it’s genuinely novel.

The 2026 status: paused

This is the headline. Innovate UK paused Smart Grants from January 2025 to develop more tailored support for innovative SMEs, with a pilot planned for spring 2025. As of the official guidance page (last updated in early 2026), the pause remains in place with no confirmed date for resumed regular rounds. Innovate UK has said it is developing new funding and support packages, but the details and launch of any replacement product are not yet confirmed.

So if you’re reading an older guide that treats Smart Grants as a live route, verify the current position before building plans around it.

How the funding worked (and likely will again)

When Smart Grants ran, the structure was:

  • Projects of 6–18 months — total eligible costs of £100,000–£500,000 (single company or collaborative).
  • Projects of 19–24 months — total eligible costs of £100,000–£1 million, and required to be collaborative.

Source: the historic competition overview. The grant covers a percentage of eligible costs depending on company size and whether the work is experimental development or industrial research.

Eligibility

All applicants must be UK-registered companies carrying out their project work in the UK; the project must include at least one SME; and the innovation must be genuinely new with a credible commercialisation plan (UKRI guidance). It funds development, not adoption — a distinction that catches a lot of applicants out.

What to do while Smart Grants are paused

  • Check the Innovation Funding Service for other open Innovate UK competitions.
  • Consider a Knowledge Transfer Partnership to build genuine AI/data capability with a university partner.
  • Look at BridgeAI for AI-adoption support, guidance and compute vouchers.
  • Explore R&D tax relief if your AI work involves genuine technological advance.

Where osFoundry and dgm fit

Whether or not you pursue a grant, a well-scoped project is what makes any funding conversation credible — and what makes implementation succeed. dgm scopes and builds AI projects on osFoundry, which lets you bring your own model keys, avoid per-seat fees, and self-host in your own cloud for data control. For UK data-sensitive work we’d use osFoundry’s EU region or a self-hosted deployment, since it publishes US/EU/JP regions rather than a UK one.

dgm is an independent integration partner, not a grant-writing service, and has integrated zero companies so far. For an Innovate UK application, work with a specialist adviser. To scope a fundable AI project, book a consultation with dgm. Not financial or legal advice; confirm scheme status on the official UKRI page.