United Kingdom Artificial Intelligence Market 2023
The UK is committed to creating an economy that harnesses artificial intelligence (AI) and big data providing great opportunities to U.S. tech companies.
The UK AI market is valued at over $21bn, and it is estimated to grow to over $1tn by 2035. The UK is the third largest AI market in the world after the U.S. and China.
The UK has one of the strongest AI strategies in the world, with significant government funding for AI, considerable research activity in the field, major VC funding and AI startups, and substantial enterprise adoption of AI.
In 2022 the UK Government published its National AI Strategy and Action Plan, outlining a package of over $1.3 billion of support for the sector. This support complements and leverages the $2.8 billion that then UK Government had previously invested in AI.
In addition to public funding, the industry is also providing funding for AI solutions, with global AI powerhouses having invested significantly in developing the UK AI market.
The current uptake of AI in the UK varies significantly by sector and within sectors. Businesses and sectors that have digitized operations and services took up AI more easily and effectively than those that have not. The digitalization of banking, insurance, healthcare, and business services in the country is the key driver for the growth of AI in the country.
AI is also being deployed in addressing complex UK public sector challenges, including improving efficiency in mainstream public services, with applications in the processing of processing tax, benefits, visas, passports, and other Government licenses. For example, the UK Government Digital Service (GDS) works with the Pensions Regulator to improve efficiency using predictive algorithms for future pension scheme behavior and His Majesty Revenue and Customs (HMRC) uses AI to help identify call center priorities.
AI solutions for data management and analysis are most prevalent in the UK, followed by natural language processing and generation, machine learning, AI hardware, computer vision, and image processing and generation.
UK AI Key stakeholders
When looking at getting involved in the UK’s AI market, U.S. companies should get acquainted with these key stakeholders:
- UK Department for Science, Innovation, and Technology: department newly created in February 2023
- Office for Artificial Intelligence: a unit within the Department for Science, Innovation, and Technology responsible for overseeing the implementation of the National AI Strategy. Its mission is to drive responsible and innovative uptake of AI technologies for the benefit of everyone in the UK by:
- Investing in and planning for the long-term needs of the AI ecosystem
- Supporting the transition to an AI-enabled economy
- Ensuring the UK gets the national and international governance of AI technologies right
- AI council: an independent expert committee providing advice to the Government and high-level leadership of the AI ecosystem
- techUK: the UK’s technology trade association
UK AI Trade Shows
AI & Big Data Expo, London, 30 November - 1 December 2023
UK AI Regulations
In 2022 the UK Government released a policy paper setting out proposals for AI regulation in the UK. The paper places a strong emphasis on establishing a framework that encourages AI innovation, setting out the ambition to be context-specific, pro-innovation and risk-based, coherent and proportionate, and adaptable.
The UK is not planning to establish a central AI regulator (differently from the EU approach), and is instead intending to provide sector regulators with cross-sectoral principles for them to apply to AI developed and used within their remits. Regulators - such as Ofcom, the Competition and Markets Authority, the Information Commissioner’s Office, the Financial Conduct Authority, and the Medicine and Healthcare Products Regulatory Agency - will apply six principles to oversee AI in a range of contexts. The proposed principles are:
- Ensure that AI is used safely
- Ensure that AI is technically secure and functions as designed
- Make sure that AI is appropriately transparent and explainable
- Consider fairness
- Identify a legal person to be responsible for AI
- Clarify routes to redress or contestability
When defining the scope of AI regulation, the paper argues for an approach that sets out the core characteristics of AI technologies but does not settle on a fixed definition. The intention would be to target regulation at the use of AI rather than the technology itself and to allow individual regulators to set out and evolve more detailed definitions in line with their specific domains or sectors.
Regulators will be encouraged to consider lighter touch options which could include guidance and voluntary measures or creating sandboxes - such as a trial environment where businesses can check the safety and reliability of AI tech before introducing it to the market.
The government launched a call for views at the time of the publication of its policy statement. The UK is reviewing the response and planning to publish the finalized white paper on AI regulation sometime in 2023.