Following the launch of the now infamous GenAI tool, ChatGPT, the six Big Tech companies have added $8 trillion to their market cap. This increase in valuation has only served to excite investors keen to benefit from the AI frenzy: AI startups in the US captured a record 46.4% of the total $209 billion raised in 2024 while VCs in there are gearing up to invest a further $87.4 billion in 2025.
Further, Meta, Amazon, Alphabet and Microsoft intend to invest as much as $320 billion this year into artificial intelligence technologies.
These huge sums suggested for a long time that the US lead in AI was already too great for other countries to catch up with. However, events this February turned this assumption on its head.
Chinese startup DeepSeek’s latest AI models, which it says are on a par or better than industry-leading models in the United States at a fraction of the cost, were a major wake-up call, showing that everything is still in play in AI.
With a £1 trillion tech sector, the UK currently ranks in third place on the global stage. Although most attention goes to the US and China, an ambitious new AI Opportunities Action Plan that aims to “mainline AI in the veins” could see the UK drive renewed interest in its innovation capabilities by leaning into its offering in AI subsets and R&D prowess.
The AI Opportunities Action Plan, and where the AI funding in UK currently falls
The launch of the AI Opportunities Action Plan in the UK is looking to shape the application of AI by aligning some of the world’s leading AI companies, academics, and the entrepreneurial community.
There are a number of parts to this program, including training and attracting the next generation of AI scientists and founders, in part via establishing an internal headhunting capability to recruit a number of individuals to the UK, exploring how the existing immigration system can be used to attract graduates from universities producing some of the world’s top AI talent, and expanding the Turing AI Fellowship offer.
A key component of the plan revolves around funding. While the UK has fallen behind in terms of innovation in recent years, its financial capital London boasts an impressive VC community.
This community’s prowess is backed by the numbers. The value of London’s tech ecosystem has surged significantly, from $70 billion in 2014 to $621.5 billion in 2023. An influx of venture capital firms generating an 800% rise in VC investment over the past decade was a major catalyst for this growth, helping London startups secure $21.3 billion in 2023 alone.
The city is also home to enterprises. For instance, global heavyweights including Google, Microsoft, Ness Digital Engineering, and Meta have a presence in the UK’s capital.
Salesforce is also one of a handful of enterprises that opened inaugural AI Centers in London this past year. Speaking on the opening Ranjit Tinaikar, CEO of Ness, which had earlier launched an innovation center in Europe, explained: “I think AI Centers are a very valid idea. And I completely understand the goals of becoming the R&D hub for driving AI innovation.”
The city has also seen a huge spike in homegrown AI startups, with 20 AI unicorns including Quantexa, Synthesia and Zyber 365. Other tech companies such as fintech giant Wise and eSIM enterprise Sim Local, which was named to the Deloitte Technology Fast 50 programme and has offices in the city, also contribute to the innovation ecosystem.
Startup Genome ranked London as Europe’s top-performing ecosystem in 2024 and the world’s top ‘smart center’, beating US cities like New York and San Francisco for the first time, according to Z/Yen Group’s Smart Centres Index.
The action plan is counting on these enterprises and investors to help develop and support the prominence of the UK’s AI ecosystem on the global stage.
The next chapter of AI research and innovation
While the AI Opportunities Action Plan has worthwhile goals, the next wave of innovation in the region will likely hinge on how effectively the public and private sectors are able to collaborate.
For example the UK government has been more receptive to AI innovation in recent years. Currently, ministers are considering letting private companies use its National Health Service data to improve healthcare with AI and turn a profit.
In its AI Opportunities Action Plan, the government also highlighted intentions to make significant investments in AI infrastructure with specific actions that include fast-tracking data center approvals and attracting top tech talent to the country.
Meanwhile it aims to expand the capacity of AI research by “20X” by 2030. This will further bolster AI work at institutions like Oxford and Cambridge, University College London, Imperial and King’s College London.
The UK already boasts many of the world’s top accelerators, including the 100x Impact Accelerator at LSE, which aims to support a new generation of social unicorns, and Edinburgh Innovations founded by the University of Edinburgh.
The verdict on whether the AI Opportunities Action Plan will succeed
The ambitious AI action plan comes at a time when Britain is trying to revitalize its economy, and has worried some experts who fear data privacy and security issues may arise.
Further, while the UK is supporting this plan, China’s leaders are going all out to invest in and support AI to compete in both the business and military sectors, while AI startups in the US such as Runway and Prezent continue to raise funding.
Regardless of the outcome of the plan, officials are seemingly leaning more towards supporting AI innovation on the whole, which will bode well for the UK.
