London is where Charles Babbage designed his “engines” – the world’s very first computers. Now, the capital has everything it needs to be a global powerhouse in the next technology revolution: Artificial Intelligence.
Our analysis of fDi Markets data shows that more London-based AI companies have expanded internationally than from any other city globally post-pandemic, 75 since 2021. Beyond this, the UK capital is the #2 global destination for AI-related foreign direct investment over the same period, behind only Dubai.
There are several reasons why London is such an attractive hub for AI companies to scale.
For one, access to the very best talent is second to none. London’s advanced AI base pumps out high-quality academic research and talent, with 13 top universities in the city offering undergraduate and postgraduate degrees related to AI and machine learning. Imperial and University College London (UCL) employ the largest number of machine learning professionals in the UK, with UCL hosting its own research centre for AI in the city.
It's no wonder that leading global AI firms such as OpenAI and Anthropic have chosen London as their European base, and others are following suit. Not just one, but two US tech giants, Microsoft and Salesforce, have announced plans to expand their AI operations in the UK capital.
Another major selling point is that London itself is a global ecosystem. More than 300 languages are spoken in the city, and AI thrives in this multilingual environment. Deep learning comes from data that is genuinely representative of diverse populations, so the breadth and depth of London’s datasets are as unique as its entrepreneurs.
Beyond this, the capital offers open and transparent data with tight privacy rules. The London Datastore, a free data-sharing portal from the Mayor of London, provides everyone with access to more than 700 datasets on London, with more becoming accessible all the time. This trusted data enables companies to build accurate and consistent AI models, leading to more reliable outputs and better decision-making.
Perhaps most importantly, though, the city is a significant player in the global venture capital landscape, with corporate and VC investment pouring into AI capabilities. Between 2021 and 2024, more than $8bn in venture capital (VC) investments were made in London-based AI companies, more than in Paris and Berlin combined. So far this year, London AI companies alone have raised $2.7bn in investment, compared with last year’s total of $2.2bn.
The Prime Minister has already signalled his intent to make London the AI capital of the world. Currently, we rank third globally for venture capital investment in AI, behind only the Bay Area and New York. Landmark deals for Wayve AI and Flo Health this year show that we are moving in the right direction, but how do we build on these success stories to create even more UK-based AI unicorns?
Enhancing the UK’s infrastructure will be at the heart of AI growth. The government has quite rightly set its sights on building more data centres and will classify them as ‘national critical infrastructure.’ Matt Clifford’s ‘AI Opportunities Action Plan’ was released last month, based on the insights of industry executives, entrepreneurs, and investors. It proposed that ‘computing zones’ could streamline the development of these centres.
The same report, commissioned by Science and Tech Secretary Peter Kyle, highlighted the difficulties around the visa process and hiring overseas talent. While the issue is complicated, London is a shining example of how encouraging diverse talent from various backgrounds can drive innovation. Any initiatives that support underrepresented groups in tech should be encouraged to enhance creativity and problem-solving within the AI field.
At this week’s GROW Summit, we hosted hundreds of serial entrepreneurs, CEOs, investors, as well as innovators, and policymakers to discuss the most significant challenges and opportunities facing UK scale-ups. It’s crucial that we continue to bring together the global innovation ecosystem in this way to keep London at the forefront of innovation. Fostering collaboration between tech communities will only attract more talent and investment from around the world.
AI has enormous potential as a cross-sector technology to help solve some of the biggest problems we face today. So far this year, according to Dealroom data, transportation and enterprise software have topped the list for AI-related venture capital investment in London, but we are seeing more capital going towards innovation within health, fintech and energy as well.
The city is in a great position, but this is no time to rest on our laurels. Cementing our status as the AI growth hub will boost the growth of our already thriving tech ecosystem and the country’s economy as a whole.
Janet Coyle is Managing Director, Grow London, London & Partners
