UK aims to overtake France as world’s third-largest AI hub

LONDON — Global technology entrepreneurs and investors are talking about Britain’s potential to become an artificial intelligence powerhouse like the United States and China.

But the country that aims to become the world’s third-largest AI hub faces major challenges.

At the London Tech Week conference held at the Olympia venue earlier this month, technology executives from around the world touted London and the UK as a place to invest.

They particularly praised how well connected the technology and AI ecosystems are in London and the reputation of many of the city’s top universities and schools.

Alex Kendall, CEO of self-driving technology company Wayve, said his company has London as its central headquarters.

I was asked if I would relocate the company, which recently raised a $1 billion funding round. softbank More — Kendall said Wayve’s headquarters “remains in London.”

“I like the environment here,” he said on stage with tech investor Brent Hoberman.

“What makes London special to me is that it is a technological powerhouse, but it is not dominated by technology. It is diverse and culturally rich.”

Wayve has offices in London, San Francisco and Vancouver.

In fact, London is home to a vibrant tech ecosystem with prominent tech brands including: sage There are also venture-backed startups Revolut and Deliveroo.

But it’s also done well to attract deep-pocketed American tech companies from abroad.

In 2014 Google Acquired DeepMind, an AI research center established in the UK. DeepMind’s technology is currently a core part of Google’s AI product offering, including its generative AI tool, Gemini.

last week, sales It has opened its first flagship AI center in London as part of its five-year, $4 billion investment commitment to the UK announced last year.

The 40,000 square foot space, located in London’s Blue Fin Building skyscraper, kicked off its grand opening with an event attended by more than 100 developers.

Janet Coyle, managing director at London and Partners, said one of the reasons London is attractive to technology companies is that leading companies, regulators and VCs are located within a short distance of each other.

“We can have a lot of meetings in a day,” Coyle said last week at the Salesforce AI Center. “You can actually meet regulators, financial institutions, creators and developers,” he said.

“You might have as many as six meetings a day, whereas in other global cities you might have to travel across the country to meet regulators or financial institutions,” she added.

London is competing fiercely with France for the position of European AI leader.

Last month, France hosted Viva Tech, the country’s leading technology industry trade fair, attracting a total of 165,000 attendees.

Arthur Mensch, CEO of Mistral, France’s leading AI startup, received a great response at this show.

French generative AI companies have raised $2.29 billion in venture funding to date, more than their British counterparts, according to a report released last week by venture capital firm Accel.

The country is home to some of the most well-funded generative AI startups on the continent, including Mistral, Hugging Face, and HIP.

With a total attendance of 45,000 across the main event and various side events, London Tech Week had less buzz than Viva Tech.

Hanno Renner, CEO of HR startup Persio, said European countries should think of AI as an opportunity to work together rather than as competition.

“The key for me is for the UK and the EU to work together to find ways to ensure that the talent currently based in Brazil who want to work in technology comes to Europe rather than Silicon Valley and promotes European innovation, whether in London or Paris. “It doesn’t matter if it’s Berlin,” he told CNBC.

The UK remains the largest AI hub in Europe.

According to a report by industry body Tech Nation, UK AI companies will have raised more than $3 billion in venture funding in 2023 – more than double the amount raised by startups and scale-ups in France, Germany and other European countries.

But critics have raised doubts about the UK’s ability to forge ahead as Europe’s leading AI hub. They say a number of factors, including the fallout from Brexit and the low number of tech IPOs, could hurt future opportunities.

“With Brexit, there are greater barriers for people to come and work in the UK,” Sanjot Malhi, a partner at venture capital fund Northzone, told CNBC’s “Beyond the Valley” podcast earlier this month.

“The UK has very good policies in terms of increasing visa availability and streamlining the visa process, particularly for technology workers and others.”

“But I think there is a lot more that can be done to streamline it and make it more accessible and create a more thriving technology environment,” he added.

Expectations for the upcoming general election are also creating political uncertainty.

Many tech executives on CNBC said they want more tech-friendly rules going forward. One of the biggest demands is IPOs and revitalizing the UK stock market.

Philip Belamant, CEO of British fintech company Zilch, said he would like to list his business in the UK but is waiting to see if more accommodating rules are enacted before reaching a conclusion.

“We have specific requests and policies for the UK to ensure that a listing in the UK means this company can succeed and is the best decision for shareholders. What we really want to do is see those implemented. .”

Another major source of uncertainty for technology leaders is the future of AI regulation in the UK. The current government has taken a flexible and light-hearted approach to AI regulation in the UK.

Rather than introducing new legislation on AI like the European Union does, the UK is seeking to apply existing regulations to the technology.

Some experts worry that this approach creates legal uncertainty for companies developing and using AI, which is advancing at a rapid pace.

Matthew Holman, technology and AI partner at law firm Cripps, said the lack of formal regulation of AI in the UK was ultimately a “net loss” for the country.

“Because most organizations in the technology world crave certainty to build an environment that allows them to maximize creativity and ROI (return on investment),” Holman told CNBC in emailed comments.