As of the first half of the year, AI startups represent over a quarter (22%) of UK tech investment, up from 12% in 2019.

According to new data from HSBC Innovation Banking and Dealroom, UK AI firms raised $2.1 billion (£1.6 billion) in the first half of 2024, putting the industry on course for a record-breaking year.

It is anticipated that British AI companies will raise $4.4 billion by the end of the year.

The $1.05 billion round for autonomous driving software company Wayve and the $50 million round for AI call center startup PolyAI are among the biggest funding rounds for UK AI businesses thus far this year.

“This data shows that positive trends for investment into the UK innovation ecosystem are manifesting and signs of early optimism are coming to fruition –particularly in the area of AI,” said Simon Bumfrey, head of technology and life sciences at HSBC Innovation Banking UK.

“We are hoping to see further large investments into UK AI and other areas, both from foreign and domestic investors as the year progresses.”

“While startups like Wayve and Monzo have secured growing levels of investment despite persistent uncertainty and stalling growth, there is work to be done to create a better environment for our tech sector,” said newly appointed Technology Secretary Peter Kyle in response to the data.

Kyle brought up the recent regulatory changes made by the Financial Conduct Authority, which were designed to facilitate London company listings.

“This government is committed to use every available lever to make sure the sector reaches its full potential,” added Kyle. “That means removing unnecessary regulatory barriers and accelerating innovation to share the benefits of technology more widely and restart the engine of our economy.”

It comes after another study that Tech Nation released last month and estimated the UK AI industry to be the largest in Europe at £72.3 billion.

“We’re excited about UK innovation and its pivotal role within the UK economy and remain committed to supporting and partnering with innovators, investors and the broader ecosystem to drive further growth,” added Bumfrey.