UK AI Industry Reveals Record Q2 Funding in 2022 Despite Economic Challenges

According to recent data from Tech Nation and Dealroom, the United Kingdom's artificial intelligence (AI) sector saw a record-breaking surge in venture capital investment during the second quarter of 2022. The funding achievement is particularly remarkable as it comes amid substantial economic turmoil created by controversial government policies. There are approximately 2,009 AI companies based in the UK, making it the European AI capital. Prominent examples include Graphcore, BenevolentAI, Darktrace, Wayve, and DeepMind. Last year, a staggering £6.6 billion was invested in UK AI companies, and so far in 2022, £3.2 billion has been invested. Tech Nation underscores that investments in AI firms are usually heavily concentrated towards the end of the calendar year. Consequently, 2022's funding is expected to at least match last year's figures. Q2 2022 witnessed £746.93 million in investments, an optimistic indicator for the remainder of the year. However, last month's widely criticized economic policies introduced by UK Prime Minister Liz Truss and Chancellor Kwasi Kwarteng have left the nation's economy in disarray. The International Monetary Fund (IMF) cautioned that the UK's Mini Budget, based on the discredited concept of 'trickle-down economics', could have severe adverse economic ramifications. Scrapping the higher tax rate for high earners led to Truss' 'anti-Robin Hood' label, as struggling households were burdened with covering the tax cuts for the affluent. Following public backlash, the policy was reversed, enabling the pound to partially recover against the dollar after reaching its lowest value since 1985. A recent speech by Liz Truss reiterating her policy course has placed additional downward pressure on the pound. Credit rating agency Fitch updated its outlook for the UK from stable to negative today, mirroring the actions of its peer S&P last week. Despite the extensive economic damage caused by the UK government's policies, certain initiatives continue to exist for industry support.

The government-backed Applied AI Programme, led by Tech Nation, aims to support and accelerate the expansion of the UK's most promising AI scaleups that focus on real-world applications with tangible impact. Ria Khan, Tech Nation's Applied AI Programme Lead, stated: 'We at Tech Nation are delighted to welcome a cohort of companies who are not afraid to break boundaries, transform and disrupt industries.... It’s a genuine honour to support such a diverse range of future market leaders on their scaling journeys as they change our world for the better.' The Applied AI programme, a six-month initiative announced in 2019 as part of the Government's AI Sector Deal, seeks to help realize the economic and social benefits of AI for improved quality of life. The companies joining Applied AI 4.0 have collectively raised over £63 million in venture capital investment. Among the companies joining Applied AI 4.0 are Re:course AI, which is constructing a 'medical metaverse' for hospitals and healthcare institutions with AI-powered digital human avatars; Fuell, creator of integrated Driver Monitoring Systems to reduce vehicle accidents; MAGIC, enabling at-home personal training sessions with holograms of the world's top athletes; and Antobot, which is developing affordable robotics for sustainable agriculture. Vanessa Viana, Global Managing Partner at Capital Lab Ventures and Applied AI 4.0 Judge, commented: 'The companies joining the Tech Nation Applied AI 4.0 represent the very best and most exciting of UK tech.... Through its network of experts, the Applied AI growth programme is a unique invaluable asset to them."

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