London Higher welcomes the government’s announcement of AI Growth Zones and the renewed commitment to fostering artificial intelligence (AI) innovation across the UK. It is reassuring to see firm plans behind the government’s growth mission in this key sector. Whilst the whole UK can, and should, benefit from AI, London remains a critical driver of success due to its unparalleled research expertise, investment landscape, and talent pipeline.
London is home to a concentration of world-leading institutions which are at the forefront of AI research. These universities not only produce groundbreaking AI advancements, but also cultivate the next generation of AI specialists who drive innovation across academia and industry.
In addition to its research strengths, London has solidified its position as a leading hub for AI investment. In 2024 alone, London-based AI startups attracted a record $3.5 billion in venture capital (VC) funding, accounting for 32% of the city’s total VC investments. This marks a 52% increase from the $2.3 billion raised in 2023 and surpasses the previous record of $2.9 billion set in 2022. These figures underscore the city’s role as the engine of the UK’s AI-driven growth.
On the global stage, London ranks third in AI VC investment, trailing only the Bay Area ($60.7 billion) and New York ($6.1 billion). Within Europe, London leads AI investment, far outpacing Paris ($2.4 billion) and Munich ($763 million). These statistics highlight the capital’s significance not just for the UK but as a key player in the global AI ecosystem.ii
As the government moves forward with its AI Growth Zones strategy, London Higher urges policymakers to recognise London’s crucial role in ensuring the UK’s AI ambitions are realised. Continued support for London’s universities and research institutions will be essential in maintaining the UK’s leadership in AI innovation and application.
