Market Intelligence
Digital Analytics United Kingdom

United Kingdom Artificial Intelligence Market

The UK has one of the most dynamic AI strategies in the world coupled with strong government funding, dynamic research activity in the field, external venture capital (VC) funding and AI startups, as well as lively enterprise activity and adoption of AI. 

The UK has recognized AI as a huge opportunity and indeed the UK Government’s Industrial Strategy white paper identified AI and Data as 1 of 4 Grand Challenges (together with Future of Mobility, Clean Growth and Ageing Society). 

In 2019, the UK Government published the AI Sector Deal, outlining a package of over $1.3 billion of support for the sector. This support complements and leverages some of the $2.4 billion announced under the cross-sectoral Industrial Strategy Challenge Fund so far, with 5 challenges having AI components that AI businesses will be able to bid on through future competitions.  The Government has also announced a new plan to make the UK a global center for the development, commercialization and adoption of responsible AI to be published this year. 

In addition to public funding, industry is also providing funding for AI solutions across key sectors: services, life sciences, agriculture and the public sector. Global AI powerhouses that have invested significantly in developing the UK AI market include Google, Nvidia, AWS, HPE, Beyond Limits and many more. 

The UK’s AI market is estimated to grow significantly during the next 5 years and to add $880bn to the UK economy by 2035. UK artificial intelligence investment has reached record highs with UK AI scaleups raising almost double that of France, Germany and the rest of Europe combined. The UK is the third country in the world (after the U.S. and China) in terms of investment in AI.  

The digitalization of banking, insurance, healthcare, and business services in the country is the key driver for the growth of the AI in the country. The country also has a well-developed infrastructure of ICT and the increasing number of start-ups will significantly contribute to the growth of AI in UK.  

Opportunities for U.S. AI tech companies in the UK exist across a variety of industry with special emphasis on applying AI to raise output in sectors of the economy that have struggled with productivity, from reducing crop disease in the agriculture sector, to delivering services digitally in the public sector, etc. 

The current uptake of AI in the UK varies significantly by sector and within sectors. Businesses and sectors that have digitized operations and services have adopted AI more easily and effectively than those that have not. In particular, organizations that have good data capability have a head-start in becoming AI-ready. Many of the UK major accountancy and law firms are experimenting with AI for services and operations. 

AI is seen as key to the next stage of improvement of quality and efficiency in UK manufacturing with machine learning having the potential to unlock 20% more production capacity through predictive, optimized maintenance of machines. 

AI is also being deployed in addressing complex UK public sector challenges, and improving efficiency in mainstream public services, with applications in the processing of processing tax, benefits, visas, passports, and other Government licenses. The UK Government Digital Service (GDS) works with the Pensions Regulator to improve efficiency using predictive algorithms for future pension scheme behavior and Her Majesty Revenue and Customs (HMRC) uses AI to help identify call center priorities. There are plans for the Digital Government Partnership to experiment with machine learning applications in Government. 

When looking at getting involved in the UK’s AI market, U.S. companies should engage with key stakeholders and trade associations: 

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