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June 2, 2021

Artificial Intelligences are taking over British business, claims govt

By Eric Johansson

The number of UK-based artificial intelligence businesses has grown by 600% in the last decade, according to Tech Nation’s new research.

The government funded tech accelerator estimates that the nation is now home to over 1,300 AI companies, up from 180 in 2011.

Tech Nation has been known to inflate such figures, however. Back in 2011, when the organisation was still called Tech City, it said that 600 tech companies had opened up shop around the famous Silicon Roundabout in Shoreditch in just one year.

However, when people looked closer at the businesses, they found lawyers, art galleries, dance studios and PR firms listed – many of them considerably older than a year – among the supposedly brand-new tech startups.

Verdict requested clarification on the matter of what Tech Nation defines as an AI company in this new research, and we were referred to this blog post which says “The term ‘artificial intelligence company’ will therefore likely be obsolete soon”. The blog post was written in 2017.

Tech Nation received £7.1m from the UK government’s Department for Digital, Culture, Media & Sport between 2019 and 2020, representing roughly 80% of its total funding.

Tech Nation estimated that the collective UK AI industry is today valued at $46.3bn, up from $1.6bn in 2011.

These business had an estimated turnover of almost $2bn and are said to employ almost 30,000 people across all regions of the UK. Venture capital investment into UK AI companies has skyrocketed from $120m in 2010 to $3.4bn in 2020, according to Tech Nation.

Tech Nation named Cambridge-based cybersecurity unicorn Darktrace’s public float in April as a success story for the industry. The organisation said the initial public listing (IPO) set “a strong precedent for up-and coming AI companies”.

While Darktrace enjoyed a 44% surge in its first day of trading on the London Stock Exchange, the debut remained tarnished by links to alleged fraudster Mike Lynch and the proposed valuation had to be cut substantially ahead of the float.

Darktrace is currently trading at 364p, slightly up from the 360p it enjoyed on its debut. Darktrace is an alumni of the Tech Nation accelerator.

The Darktrace float followed Deliveroo’s disastrous IPO in March. The food delivery startup lost almost a quarter of its value in its first day of public trading.

London Stock Exchange floats are central to the chancellor of the Exchequer, Rishi Sunak’s, plan to ensure the UK’s future as a tech hotbed post-Brexit, as outlined in the Spring Budget.

“This is a prime time for listings and it is essential that London continues to be an attractive place for tech companies to start, scale and list,” Gerard Grech, chief executive of Tech Nation, tells Verdict.

“Recent listings such as Darktrace represent companies that have gone from strength to strength and are at the heart of the future digital economy. It’s important that people, investors and government get behind companies like these to deliver world-leading businesses right here in the UK.”

Tech Nation’s AI research noted that only 67 AI companies were founded in 2020 in the UK, down from 133 in 2019.

AI companies seem to thrive the most in the fintech industry, with 10% of the businesses in the research operating in the financial sector. Cybersecurity and healthtech businesses represented 5% and 4.5% respectively of UK AI.

“These fantastic figures show the UK is rapidly becoming an AI superpower, with government support playing a critical role,” said Oliver Dowden, the UK’s digital secretary. “We have committed £1bn through our AI Sector Deal to drive even more growth, create new jobs and use the power of tech to tackle some of the world’s biggest challenges.”

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