Funding for UK companies focused on AI more than doubled to £6.3 billion in 2025

UK companies whose main business is artificial intelligence raised £6.3 billion in 2025, more than twice the £2.9 billion they raised in 2024, according to the government's annual AI sector study, published on October 29, 2026. The number of deals rose from 768 to 917. The study was carried out by Perspective Economics with Beauhurst, Ipsos and other advisers and published by the Department for Business, Innovation, Science and Trade (BIST). Its investment figures come from Beauhurst, which tracks equity deals in high-growth UK companies.

The money was concentrated in a few hands. Rounds of £100 million or more made up about 60% of the 2025 total, and two companies, Nscale and the drug-discovery firm Isomorphic Labs, together took almost half of all the money raised during the year. Nscale alone raised £2.5 billion over three rounds, and Isomorphic Labs £464 million. More than two-thirds of the year's total came in the second half, and the final quarter, at £2.7 billion, was the strongest on record.

More first-time rounds

At the other end of the market, more young companies raised money for the first time. First rounds made up 49.5% of deals in 2025, up from 44% in 2024 and about a third between 2021 and 2023. Seed-stage businesses, typically young startups that are often still proving there is a market for their product, were 66% of the dedicated AI companies that raised money in 2025. Because first rounds are usually small, the study warns, annual totals still depend heavily on what a handful of large companies raise.

Foreign investors dominated the largest deals. NVIDIA, directly and through its venture arm NVentures, has taken part in 14 rounds worth £3.9 billion since 2023, including rounds for Nscale, Wayve and PhysicsX, the study says.

A bigger sector, partly through better counting

The study identifies 10,488 UK companies with AI products or services, up 79% from 5,862 a year earlier, and about 1,750 new AI companies were incorporated in 2025. The authors say part of the jump reflects better coverage and more companies describing their products as AI, but that it is underpinned by genuine growth. Revenue from AI rose 41%, and the number of people in AI-related jobs rose 51%.

Capital is still the main constraint

Even after the jump, firms said money held them back more than anything else. In an Ipsos survey of 376 AI companies in May 2026, 61% said access to equity investment significantly affected their ability to meet their goals, the barrier cited most often. Scale-up funding was the factor firms most often expected to weigh on their future AI activity (57%), and the reason they gave most often for possibly moving work out of the UK. The study describes a “bifurcated” funding market, in which very large sums go to a few infrastructure and frontier AI companies while many firms building AI applications report a much tougher climate for raising money.

The survey and interviews took place between April and June 2026, before the government's October 28 Budget. The Budget announced a 10% capital gains tax rate on up to £10 million of lifetime gains for founders and significant early investors in high-growth companies, and a £2 billion uplift for the British Business Bank. Our report on Founders' Relief has the details.

The authors caution that their figures are experimental estimates, not official statistics, and that the investment data may miss “stealth” deals that are neither announced nor promptly filed.