British AI companies pulled in a record £2.9 billion in investment last year, with the government now pushing for even more funding to cement the UK’s position as a global tech hub, according to Government of United Kingdom announcement.
The average deal size hit £5.9 million as investors backed AI startups across the country. Technology Secretary Peter Kyle told business leaders at London’s Mansion House that the sector now adds £11.8 billion to the UK economy—double what it was worth in 2023. The boom has created 86,000 AI jobs nationwide, with companies spreading beyond London to cities in the Midlands, Yorkshire, Wales, and the North West.
The government has been cutting red tape and building data centers to attract more AI investment and talent. Kyle wants Britain to become the go-to destination for AI companies to set up, grow, and go public. The push comes as countries worldwide compete to dominate the fast-growing AI market.
“Countries can only prosper if they get the big calls right,” Kyle told the audience of tech bosses and financiers. “We want you to keep investing here, keep building here – list here, scale here. If you invest in Britain, you’ll share in that competitive edge.”
Chancellor Rachel Reeves said the government is “slashing burdensome red tape” to create better conditions for AI investment. The sector’s growth is already changing communities by creating jobs and bringing money to regions outside London.
To keep the momentum going, the government launched an AI assurance program today with £11 million in funding. The plan will train independent experts to check AI systems and make sure they work properly, helping build public trust in the technology.
The program aims to create a whole new industry around AI safety checks, with applications for funding opening in spring.
