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This Government study suggests a problematic trend in the UK's AI market.

ended 04. September 2025

New research published by the Department for Science, Innovation and Technology  overnight shows that the UK has a strong AI ecosystem, particularly at the early stages of company formation where research funding and early-stage capital is required. Some key findings below.

  • In 2024, there was a 58% increase in the number of in-scope ‘dedicated and diversified’ AI companies compared to 2023, suggesting broad recognition of AI-related business opportunities across the economy, and particularly within diversified companies.
  • Record AI company registrations in 2023, and a 10 percentage point increase in the share of micro businesses in 2024, are indicative of a vibrant AI start-up ecosystem.
  • In 2024, total estimated AI revenue has increased by ~68% to ~£23.9 billion (+£9.7 billion), with most of the revenue increases generated by diversified AI companies (96%, £9.3 billion).

Any thoughts, send them across ASAP.

4 responses from the Newspage community

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Simon Bain
CEO at OmniIndex
This Government study suggests a problematic trend in the UK's AI market. While growth seems strong, 96% of it comes from diversified companies, potentially reliant on third-party AI. This masks a concerning decline in dedicated AI companies, dropping from 60% in 2022 to 56% in 2024. This shift is critical. True innovation and sustainable growth comes from dedicated AI companies developing original, tailored, solutions. While a reliance on third-party AI puts businesses at the mercy of others for costs, infrastructure, and development. Furthermore, a company using third-party AI is entrusting its customer data to another entity. Companies with their own bespoke AI engines, meanwhile, are fully in control, enabling transparency about data use as well as security. The decline of these dedicated innovators is a potential threat to the UK's long-term AI leadership. To secure a prosperous and innovative future, the UK must actively foster and protect its native, dedicated AI developers.
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
The UK has the third biggest AI industry in the world, after the US and China. This sounds great, and is really promising. However, the government need to create an environment that is exciting for these companies or else they will get bought up by larger US firms or list overseas and the Chancellor won’t see the benefits they create.
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Oli Garnett
Co-Founder at Something Familiar.
Britain’s AI boom looks less like innovation and more like a village fete where every stall is selling the same lemonade. A 58% surge in new companies proves everyone’s slapping AI on their business plan like it’s a miracle cure. Revenue is up 68%, but almost all of it comes from old firms bolting on some machine learning and calling themselves innovators. That’s not a revolution, it’s rebranding. The danger is we end up with a graveyard of AI logos rather than lasting businesses. The talent and ideas are here, but unless we cut through the hype, Britain’s “AI moment” will be remembered as marketing spin, not genuine progress.
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Chris Marshall
Owner at Onstate Limited
Amid the rush to placate investors and appease shareholders, companies need to be careful not to rush blindly into AI adoption - particularly with Generative AI as popularised by the likes of ChatGPT. The technology is still very new and contains significant, as-yet unsolved security issues. These are less bugs and more a feature of the system: the same randomness that makes them such effective creative partners can be a huge liability in a system handling payments or screening candidate CVs, to give but two examples. One example of a solution that has possibly been rushed out: Argos has a friendly dinosaur chatbot - Trevor - on their website. Trevor is ostensibly there to help you shop but, by asking the right questions, we've been able to get him to provide step-by-step instructions on making a petrol bomb. There's a rush to be first, but there are profound downsides that come with the possibilies this technology brings.