Sep 9, 2025

A Perspective Economics study commissioned by DSIT sizes the UK AI sector at 5,800 companies, an increase of 85% over two years Share this item with your network: By Published: 09 Sep 2025 14:00 A Perspective Economics study commissioned by the Department for Science, Innovation & Technology (DSIT), published last week, states that the UK’s AI sector now contains 5,800 AI companies – an increase of 85% increase over the past two years. Revenue from AI now stands at £23.9bn, according to the study. In a foreword to the study, Feryal Clark , Parliamentary under-secretary of state for AI and digital government, said this means since 2022, the UK AI sector has grown 150 times faster than the economy at large. Perspective Economics is a boutique economics and policy advisory firm based in Belfast, founded in 2017 by Jonathan Hobson and Sam Donaldson. It has done other government studies, including one on the UK’s cyber security sector for the Department for Digital, Culture, Media and Sport. So, how does its study construe the AI sector? Its headline companies are Google Deepmind , Darktrace , computer vision company Tractable, and energy management outfit Limejump. But it also includes Fujitsu and the London Stock Exchange Group. It adopts a capacious definition of what constitutes an AI company, classifying them as “dedicated” or “diversified” companies that provide AI products or services as part of a broader business offer. The companies assayed come from 22 sectors, from aerospace, through healthcare and wellness, to telecommunications. Most of the “dedicated” suppliers are developing or applying perceptual systems, such as computer vision and image processing, speech and audio processing, multi-modal integration, and anomaly/signal detection. Companies primarily involved in developing or applying autonomous and agentic systems number 1,684, while 1,280 provide AI infrastructure and 1,265 do AI security, according to the research. The dedicated AI company revenues increased by 9% between 2023 and 2024, from £4.4bn £4.9bn. US tech giants Amazon, Google Deepmind, IBM, and Meta have added most to estimated revenue and employment increases, while generative AI model providers Anthropic and OpenAI have seen among the largest percentage increases in estimated UK AI employment since 2023. Since starting the study in 2022, Perspective Economics calculates that the number of full-time employees employed across both dedicated and diversified AI companies has increased by 72%, from 50,040 in 2022 to 86,139 in 2024, an increase of 36,099 workers. In their conclusion, the study’s authors said that investment in the UK’s AI  sector has mounted to a “record £2.9bn, surpassing previous highs. Renewed investor confidence is complemented by significant inward investment, with £15bn of investment announced in 2024 creating up to 6,500 jobs.” They add that while London and the South East still account for a majority of AI activity, the doubling of AI companies in regions such as the West Midlands, North West and Yorkshire and the Humber demonstrates substantive uptake of AI related opportunities across regions. In the study, they note that in 2023 and 2024 the North West accounted for the fourth highest share of new company incorporation, followed by the West Midlands, the South West and Yorkshire and the Humber. However, the study also shows that only 3% of new companies are in Scotland and, 1.4% in Wales, and 0.9% in Northern Ireland. The study’s appendix registers some commentary from interviewees that enter some caveats to attempts to exaggerate the scale and scope of the UK’s AI sector. One AI investor said: “We’re not interested in companies that have simply bolted on a bit of generative AI. We’re looking for businesses with proprietary datasets or valid imported data, and the capability to connect that meaningfully to relevant LLMs. That’s where the IP lies – and that’s what’s interesting. “The generative AI boom has led to an explosion of companies across the country – not just in the South East and Cambridge. There are now hundreds, maybe even thousands, of companies in the North that meet the criteria for our fund. The challenge now is how to identify the right ones”. Another registered a precise skills issue: “What is more difficult is finding data scientists who are commercially minded – people who understand business problems and can use statistics to solve them. That’s quite rare.” And in terms of sovereign AI capability, one said: “[The UK has] some good colocation data centres, but most of our data is stored with AWS or Google.” Read more about government AI strategy Interview: Differentiating with AI in pet care Platform engineering is about more than what’s going on Backstage