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The UK is now third in the world for artificial intelligence (AI) investment, behind the US and China, after attracting more capital in six months than in all of 2018.
AI investment in the UK reached £859.29m in that time, compared with £825.85m in the preceding 12 months, according to figures collected by business information resource Crunchbase.
The figures show that the UK’s AI sector is now in its fifth year of consecutive growth, with investment increasing almost six-fold between 2014 and 2018.
The growth has predominately been fuelled by startups with 50 or fewer employees, which account for 89% of the UK’s AI ecosystem.
According to representatives from entrepreneurs network Tech Nation, the focus now needs to be on scaling the UK’s existing AI business to capitalise on these investment trends.
“For the UK to maintain its authority in AI, we need to nurture scalable, globally competitive, homegrown AI companies that solve real problems,” said Harry Davies, applied AI lead at Tech Nation.
“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.”
For comparison, Chinese AI companies tend to have larger workforces, with 53% having more than 50 employees.
This is important to note because, as angel investor Ian Hogarth points out in his blog, there are “perhaps 700 people in the world who can contribute to the leading edge of AI research, and perhaps 70,000 who can understand their work and participate actively in commercialising it”.
Given that the Chinese government is rolling out incentives to attract AI talent, as well as the fact that an ever-higher percentage of AI research papers are coming from China, the UK still faces a battle to build on its position despite the high investment figures.
AI investment to boost UK talent
As part of the £1bn AI sector deal announced in November 2017, which aims to place the UK at the forefront of this emerging global industry, the Department for Digital, Culture, Media and Sport (DCMS) has included money for training 8,000 specialist computer science teachers, 1,000 government-funded AI PhDs by 2025, and a commitment to develop a prestigious global Turing Fellowship programme.
Tech Nation’s Applied AI growth programme, which has just announced its first cohort of 29 UK companies, is part of this sector deal, and aims to support companies as they scale from the early stages of growth.
The programme is structured around sessions that focus on key scaling challenges that include hiring talent, sales in very regulated industries, raising Series A investment as a Deep Tech company, and commercial support for technical teams. The cohort was chosen by a panel of judges based on each one’s ability to apply AI-driven solutions to real-world problems.
This includes Glasgow-based ClinSpec DX, which uses AI to provide cost-effective blood tests for the early detection of brain tumours, and London-based Cervest, which utilises machine learning to answer questions linked to climate uncertainty, land, and natural resources. The average team size of the 29 companies is 12, while the largest is 35.
“At a pivotal time for our business, we are looking forward to benefiting from a valuable external perspective and expert counsel, as well as the opportunity to amplify our reach to prospective partners and markets as we continue to grow our business,” said CEO and founder of Cervest, Iggy Bassi.
While China and the US remain at the top in terms of AI investment, AI scaleups in the UK raised almost double that the rest of Europe combined in 2018, a lead that the programme hopes to consolidate.
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