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Private investment in British AI companies reached £2.9 billion in 2024, with an average deal size of £5.9 million, according to the Department for Science, Innovation and Technology (DSIT). The figure was announced in September 2025, so “last year” refers to 2024—not 2025. It measures company investment, not the separate value of AI-related inward-investment projects or investment pledges.
How much was invested in UK AI companies?
DSIT reported £2.9 billion of private investment in British AI companies in 2024 and an average deal size of £5.9 million. The government described the result as a record for this measure. The sector study published alongside the announcement says investment in dedicated AI companies rebounded above its previous high in 2022. Deal volume was slightly below 2022 levels, while average deal sizes increased. DSIT’s September 2025 announcement and the 2024 AI Sector Study cover the figure.
The total is not a count of every pound spent on AI-related activity in the UK. The study uses a business-focused definition because there is no dedicated AI Standard Industrial Classification code. It distinguishes dedicated AI firms from diversified companies that use or develop AI alongside other activities. Its investment finding concerns dedicated AI-company investment; its broader employment and revenue estimates cover the study’s in-scope AI sector.
What the 2024 sector study found
The Perspective Economics-led study, commissioned by DSIT, estimated 5,862 AI companies in 2024, up from 3,713 in 2023 and 3,170 in 2022. It estimated 86,139 AI-related employees, £23.9 billion in sector revenue and £11.8 billion in gross value added (GVA) for 2024.
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| Measure | 2024 estimate | Reported change |
|---|---|---|
| AI companies | 5,862 | 3,713 in 2023; 3,170 in 2022 |
| AI-related employees | 86,139 | Up 33% from 2023 |
| Estimated sector revenue | £23.9 billion | Up about 68% from 2023 |
| Gross value added (GVA) | £11.8 billion | Up 103% from 2023 |
These are study estimates, not figures for AI-native startups alone. The study combined secondary-data analysis with 298 company survey responses and 52 in-depth interviews. For diversified firms, it estimated AI-related employee numbers using web data, rather than treating every employee or all company revenue as AI-related. The study’s report and methodology explain its taxonomy and approach.
Why the investment figures are easy to confuse
Several large numbers describe different kinds of activity. They have different time periods, populations and meanings, so they should not be added together or treated as interchangeable.
| Figure | What it measures | What it does not mean |
|---|---|---|
| £2.9 billion in 2024 | Private investment in British AI companies; the sector study identifies the rebound for dedicated AI companies. | Not the value of all AI-related projects entering the UK, or a cumulative government pledge. |
| More than £15 billion in 2024 | Capital investment associated with 51 AI-related inward-investment projects into the UK; more than 6,500 jobs were expected. | Not equity or private funding raised by UK AI companies. The projects were primarily infrastructure-related. |
| 44% in 2025 | AI companies’ share of equity investment into smaller businesses, as reported by the British Business Bank. | Not a total investment amount for all UK AI companies, and not directly comparable with the £2.9 billion figure. |
| Nearly £100 billion | Investment pledged for the UK AI sector since the current government took office, cited in a June 2026 parliamentary answer. | Not an amount shown to have already been deployed. |
DSIT reports the inward-project figures in its 2024 AI Sector Study. The British Business Bank’s 2026 Small Business Equity Tracker summary gives the smaller-business figures. The pledge figure appears in a June 2026 parliamentary written answer. A pledge is a stated commitment, not proof that the money has been invested, while inward-project capital is not the same as funding received by domestic companies.
What newer data say about AI investment
The British Business Bank’s 2026 summary of its annual Small Business Equity Tracker says AI companies received 44% of equity investment into smaller businesses in 2025, accounted for more than a quarter of deals, and saw AI-related deal investment rise 48% year on year. This describes a defined smaller-business equity market. The reviewed figures do not establish a comprehensive 2025 total for all UK AI-company investment on the same basis as the £2.9 billion reported for 2024.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsThe wider smaller-business equity market was not rising uniformly: total investment fell 4% to £12.3 billion, seed- and venture-stage deal counts declined, and the ten largest fundraisings accounted for 23% of investment. The Bank also said a handful of AI megadeals helped drive overall investment growth into the first quarter of 2026. These details matter because a strong AI share or rising deal value can coexist with weaker activity across other companies and stages. The Bank’s tracker summary sets out the broader market context.
Where UK AI companies are located
The 2024 study estimated that about 75% of AI companies’ registered offices were in London, the South East and the East of England. That is a measure of company location, not a regional breakdown of the £2.9 billion investment total.
The study also reported annual company growth of 20% to 50% across UK regions. Compared with 2022, it found at least twice as many AI companies in the West Midlands, North West, East Midlands, Wales, and Yorkshire and Humber. These findings point to expansion beyond the largest established centres, while the concentration of registered offices remained substantial. The AI Sector Study provides the regional estimates.
Separate figures from the British Business Bank concern equity investment across the broader UK market, not AI alone: in 2025, investment rose 82% in the North West, 74% in Scotland and 104% in the South West, with each increase driven by a small number of large AI and energy deals. London’s share of all UK equity investment declined from 60% to 57%. These regional market changes should not be read as regional AI-funding totals. The Bank’s 2026 tracker summary describes the figures.
Why might investment in UK AI be increasing?
The available figures show rising company counts, larger average investment deals in 2024, and a significant share of smaller-business equity going to AI companies in 2025. They do not, on their own, prove a single cause for the increase. The sector study’s account of larger average deals alongside deal volumes slightly below 2022 levels suggests that the value rebound was not simply a matter of more deals being made.
Infrastructure is another part of the picture, but it belongs to a separate measure: the 51 inward-investment projects in 2024 were primarily infrastructure-related. The study identifies the United States as the largest source market for these inward projects. Their capital value should not be folded into domestic company-funding totals.
The British Business Bank’s findings also call for care when interpreting growth: its data show concentrated investment, declining seed- and venture-stage deal counts, and a large contribution from the biggest fundraisings. The evidence supports describing AI as a prominent destination for UK business equity, but not assuming that capital is spreading evenly across regions, sectors or company stages.
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