Investment in UK-based artificial intelligence (AI) companies has reached record levels after the first six months of 2019 saw more investment than the entirety of last year, according to new data.
Venture capitalists had invested $1.63bn (£1.32bn) into UK projects by June, surpassing the $1.21bn raised by the end of 2018 and marking a record year for AI funding growth, according to a report from industry body Tech Nation.
AI funding has grown for four consecutive years in the UK, placing it third in the world behind the US and China.
The UK has played a key role in fostering many notable AI and machine learning companies, including DeepMind, the prolific research lab purchased by Google in 2014 which has partnered with the NHS and Moorfields Eye Hospital to develop diagnostic models.
The US has invested $9.7bn into AI thus far in 2019, compared to $8.6bn in 2018, while China is yet to surpass its 2018 total – backing $3.5bn to date compared to its $6.8bn spending last year.
The number of AI companies operating in the UK has also grown, from 820 last year to 839 currently. The vast majority – 89 per cent – are start-ups employing fewer than 50 people.
Comparatively, China has just 303 known AI companies (up from 299 in 2018), with just over half (53 per cent) employing more than 50 workers, while the US’s total has grown from 3,711 to 3,772.
Tech Nation runs an Applied AI growth programme, which is part of the government’s AI and Data Sector Deal, to support 29 up-and-coming AI companies in tackling the challenges of growing larger.
“For the UK to maintain its authority in AI, we need to nurture scalable, globally-competitive, homegrown AI companies that solve real problems. Yet, the pool of AI-focused companies that achieve this beyond Series A remains slim, despite the hype, and the path to scale is uniquely challenging,” said Harry Davies, lead of the Applied AI project.
“That is why it is so important that we champion our most promising UK AI companies with the greatest potential for growth as they look to scale.”
Ravi Krishnamoorthi, Managing Director & Head of Private Sector at Fujitsu UK & Ireland said: “With technology having an undeniable impact on our personal and professional lives, it’s hugely promising to see the UK’s tech sector remains attractive to investors. Despite economic and political uncertainty, tech provides great promise for the UK. However, if we are to see the UK tech sector truly succeed it’s important that organisations have not just investors on board, but the public too.
“In fact, our own recent research found that the majority of UK businesses (58%) feel that public nervousness around technologies is holding them back from innovating. Combine that with the fact that UK citizens have admitted that they have less trust in organisations now than they did five years ago (39%) and over two-fifths (42%) of people are unsure or don’t feel AI will have a positive impact on life in the next five years, and it’s clear that there is a real need for a new approach.
“If we’re to see businesses fully embrace and unlock the opportunities that are available thanks to the likes of automation and other emerging technologies, organisations need to achieve the right balance between addressing the concerns of the public and the need to plan radically for the future.”