Hey friends,
I’ve got some crazy news to share about AI in the UK. According to a new government report, since 2022 the UK AI sector has grown 150 times faster than the overall economy. Just last year, revenues smashed records and hit £23.9 billion!

What’s driving this boom?

The biggest reason is investment and startups. Right now, there are over 5,800 AI companies in the UK — that’s a 58% jump since 2023. And guess what? More than 90% of these are small and medium-sized businesses (SMEs). That means innovation is happening from the ground up, not just from big tech giants.

This growth is also creating jobs. In just one year, employment in the sector jumped by a third — now over 86,000 people are working in AI across the UK.

The investment flood

Investor confidence hasn’t just returned, it’s exploded:

£2.9 billion was poured into UK AI companies in 2024 alone.

Plus, the UK attracted £15 billion in international capital, expected to create another 6,500 jobs.

London and the South East are still the main AI hubs, but regions like the West Midlands, North West, and Yorkshire are also seeing their AI companies double since 2022.

But it’s not all smooth sailing

Of course, there are challenges too:

Talent shortage – companies are struggling to find enough skilled people.

Late-stage funding gap – early-stage investment is strong, but scaling up after Series A is tough.

Regulation uncertainty – businesses want a clear AI rulebook.

Experts point to the EU’s new AI Act, which gives companies a clear roadmap for compliance. The UK still hasn’t provided the same clarity, and that could slow adoption if trust and safety issues aren’t addressed.

What’s next?

Despite these growing pains, optimism is high. In fact, 58% of AI firms expect their revenues to grow by 50% or more in the next year. If the UK can fix the funding and regulation gaps, it’s on track to become one of the world’s top AI powerhouses.