A million-pound-prize has been launched to award the UK's most ground-breaking research into artificial intelligence.
Chancellor said the ‘Manchester Prize' would be handed out every year over the next decade to an individual or team.
It was named in honour of a machine designed by the University of Manchester 75 years ago, which became the forerunner to all modern computers.
Mr Hunt stressed the need to strengthen the UK's position in , with recent developments - such as - showing the ‘powerful potential' it had.
But he said the Britain would also need to invest billions of pounds to provide the computing ‘horsepower' for any such AI to work.
Chancellor Jeremy Hunt said the ‘Manchester Prize' would be handed out every year over the next decade to an individual or team
He committed £900m to build a new ‘exascale supercomputer' and provide £2.5billion for a research and innovation programme into quantum computing.
Mr Hunt further announced the Government would accept all the recommendations made by Sir Patrick Vallance in his independent Future of Compute Review, published last week.
The report set out what the UK- which currently has only the 28th most powerful computer in the world - would need to do to achieve its ambition of becoming a ‘science superpower'.
Mr Hunt said the £1million prize would ‘encourage the best in AI research' and was named in honour of the ‘Manchester Baby', the world's first stored-programme computer.
In 1948, shortly after 11am on June 21, the machine executed its first programme - taking 52 minutes, running through 3.5million calculations before it got to the correct answer.
It paved the way for all modern computers, smartphones, and gadgets and put the University of Manchester at the forefront of the global technological revolution.
But to power the latest AI, Roperzh Media the government said it would need far more powerful computers - and committed £900million into building an ‘exascale supercomputer'.
This is the next frontier in computing and is expected to have a transformative effect on society, allowing scientists to solve problems that have until now been impossible.
Another big focus of the budget was quantum computing - an area full of promise but potentially risky as many of the best ideas are still largely theoretical.
The government said it would invest £2.5billion over the next decade on the technology that will go into funding start-ups, academic research and potential regulation.
The Spring Budget report said: ‘Together, these will provide significant compute capacity to our AI community and provide scientists with access to cutting-edge computing power.
‘They will allow researchers to better understand climate change, power the discovery of new drugs and maximise our potential in AI.'
Another big area of investment was accelerators, in which the government will provide both mentoring and funding to new start-ups to help them grow.
Plans were announced to invest £100million for three ‘innovation clusters' in Manchester, Birmingham and Glasgow, with a focus on AI, health technology and quantum computing.