UK reaches ‘critical mass’ of homegrown AI companies with over 600% growth in past decade
The UK is now home to over 1,300 AI companies with a collective turnover of almost $2 billion, representing a 600% increase in the number of firms over 10 years, according to data released by Tech Nation.
New data reveals the huge growth achieved in the UK’s AI sector over the past ten years. The UK is now home to over 1,300 AI companies, up from only 180 companies in 2011, representing a 600% increase.
AI companies are scaling across all regions of the UK, with 50% of the UK’s top 10 scaling AI companies outside of London. The UK’s major AI hubs include Cambridge and Edinburgh. Most recently Cambridge-based Darktrace IPOed in Spring 2021, setting a strong precedent for up-and-coming AI companies, the company uses machine learning and AI to protect clients from cyberattacks, with shares soaring by 32% on the first day of trading.
Not only are the UK’s scaling AI companies driving growth across the UK economy, with prevalence in fintech (10%), cyber (5%) and healthtech (4.5%), the AI sector is also an important engine of growth, with a collective valuation of $46.3bn (up from $1.6bn in 2011), turnover of almost $2bn, and employing almost 30,000 people across all regions of the UK. Furthermore, VC investment into UK AI companies has rocketed from $120mn in 2010 to $3.4bn in 2020.
AI technology is also key to building the foundations for the future growth of the UK economy, for instance, Bristol-based Graphcore are building next-generation AI chips, while OBS Medical are developing predictive algorithms to transform healthcare.
However, between 2019 and 2020, there was a 50% decrease in the number of AI companies being founded, with just 67 companies founded in 2020, compared to 133 in 2019. These figures highlight the need to continue to support the UK’s AI sector in an increasingly competitive global landscape, and to build the key enablers of growth, such as R&D capabilities, and links between industry and academic institutions.
Today, Tech Nation will be hosting an event in collaboration with the Office for AI and the AI Council, featuring key government and AI industry stakeholders, which will explore how the UK is scaling up and levelling up the AI ecosystem as the Government develops its National AI Strategy, releases its 2021 AI Roadmap and prepares for a future built on deep tech.
Gerard Grech, chief executive of Tech Nation, commented: “The UK is a central hub for transformative AI technologies, and the staggering growth we are seeing in the sector is encouraging and exciting.
“Last year alone, UK AI saw a 17% increase in VC investment, more than any other country. At this pivotal time, we must work to support and accelerate these businesses as they continue to shape our future; from transforming financial processes to tackling climate change and revolutionising modern healthcare.
“The AI Council’s recently released AI roadmap is a step in the right direction to unlocking the full potential of UK AI, which has the power not only to boost our own economy by 10% (by 2030), but also to transform societies around the world.”
Tabitha Goldstaub, chair of the UK’s AI Council, added: “These figures show the vibrancy of the UK’s growing AI ecosystem. Now is the time to ‘double down’ and support the 1,300 AI companies to catalyse more innovation that will in turn benefit the economy and society and ensure the UK’s remains at the forefront of developing new data-driven technologies.”