Location, location, location. Choosing a home base can be a make-or-break decision for ambitious tech startups. The city you select impacts access to capital, determines your talent pool, and potentially opens the door to network benefits in a vibrant industry ecosystem. If those cornerstones are in place, it’s easier to build the foundation of a successful technology business. That’s why London is the natural home for companies carving out a place in the AI economy.
Can London really lead the world in AI? It’s no pipe dream. The UK’s AI market is currently worth close to 17 billion pounds, and expected to reach nearly 800 billion by 2035 – most of it centered around London and the South East. While sectors like IT and telecoms currently show the highest adoption rates, key industries like financial services are moving quickly to build AI into service offerings and operating models.
We have the people, we have the capital, and we’re already Europe’s number one destination for founders looking to grow a startup business. Globally we’re second only to Silicon Valley.
Yet AI is proving to be a game changer, upending old business assumptions and making demands on data, people, and infrastructure . London is ready to meet that challenge.
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Making the case for London
First in our favour is a diverse talent pool. Londoners speak over 300 languages, giving us a cosmopolitan inclusivity that is naturally attractive for AI companies looking to test new models. We can also provide ready access to corporate customers. There are 250 banks here – we have more American banks than New York – most of them reachable within a few Tube stops.
And then there’s access to growth capital. Over the last three years we’ve seen £8 billion go into AI companies in London alone. That’s more than Paris and Berlin combined.
The UK Government will play a key role in fostering an AI-friendly business environment. We have new leadership in Westminster that’s committed to seeing British AI thrive. Prime Minister Keir Starmer has made it clear he wants London to be the world’s AI capital, and Britain to be an AI superpower. We’re already seeing more VC money, institutional interest, and long-term AI investments from Big Tech, exemplified by Salesforce establishing its first AI centre of excellence here. World-beating startups like Wayve, autogenAI and Lendable are already here. And don’t forget that Google’s DeepMind began its life as a laboratory project out of University College London.
It all adds up to a compelling case for London to be dotted with AI-company HQs.
London’s path to AI leadership
Of course, we can’t just sit back and wait for the AI influx to happen automatically. Our education system needs to adapt and ensure that the skills it needs are there for AI companies tap into and to continue creating the game changing technology of tomorrow.
Post-secondary education is already stepping up. There are 27 universities in London offering courses in machine learning. In secondary education some schools are building AI into their curricula quite enthusiastically, while others may be more hesitant. A lot of research is being done and there’s a big ambition to upskill future generations earlier.
Charities like Founders for Schools are helping fill the gap by bringing more AI entrepreneurs into classrooms to inspire tomorrow’s entrepreneurs and stoke enthusiasm for math and science. That’s making a big difference, but we need to do more.
The artificial intelligence marketplace won’t wait, and its already undergoing major changes. The rapid rise of agentic AI means companies can configure AI tools of their own and set them to work, making decisions and taking action independently within rules and parameters.
We’re going to see a wave of AI innovations like Agentforce that free more and more people from handling routine tasks allowing companies to focus on efficiency and growth.
A place to break new ground
An AI company’s home is its castle, providing shelter to grow and evolve while fortifying it against competitive challenges and shifts in the economic weather. For AI firms crossing the threshold from concept to market entry, London is the natural destination.
At London & Partners, working in partnership with leading AI innovators like Salesforce, we’re committed to helping Britain’s capital city become the AI capital of the world.
Can London become the AI capitol of the world?
Sasha Qadri is joined by Janet Coyle CBE, Managing Director at London & Partners to discuss why London is uniquely positioned to lead in artificial intelligence innovation.
