The news that Radical Ventures is raising a new $550 million fund to invest in AI startups, with a London outpost headed by Aaron Rosenberg formerly of DeepMind, is an excellent sign for the UK’s startup ecosystem. London’s AI cluster is genuinely a leader in the field. Even if we shy away from “world-beating,” a phrase which was not only overused but became faintly toxic to many during the pandemic, it is no exaggeration to say that London is up there with Silicon Valley and a handful of other places where truly important AI breakthroughs are happening.
We have a deep affinity for London’s AI cluster thanks to the strength of our CAP AI programme. Having worked with scores of startups through the programme, we know better than most what the CEOs and CTOs of AI startups believe they need to succeed.
One of the great barriers for many startups in this area is the sheer expense of hiring the talent they require. This is an issue we sought to address through the KEEP (Knowledge Embed and Exchange Partnership) project, pairing top-notch researchers from British universities with London-based startups. By funding 37% of AI/ML researcher salaries, KEEP has directly contributed to the success of dozens of startups. One of them, job-hunting platform Jump, was acquired by Spanish unicorn Jobandtalent last year in large part due to the strength of the work done by their KEEP hire.
The AI technology frontier is also changing with breathtaking speed, most notably with the enormous advances in generative AI that have gone public over the past year. Not only is talent expensive and difficult for startups to find; viable business models and defensible moats are not yet obvious, two things which no investor can afford to ignore in the present climate. As Silicon Valley VCs a16z reflected in this thinkpiece, it’s still unclear where value will accrue. They write:
“The potential size of this market is hard to grasp — somewhere between all software and all human endeavours — so we expect many, many players and healthy competition at all levels of the stack.”
In other words, AI is an enormous market opportunity with some early leaders (OpenAI and their close competitor, London-based StabilityAI) but everything else is in flux and shifting rapidly. This should be a call to action not only for founders and investors but those in government and beyond with an interest in seeing the UK technology sector succeed. Some of the world’s most exciting and original AI companies are already here (DeepMind, the aforementioned StabilityAI) and the current wave of company creation is far from over. The agglomeration effects are being handed to us on a platter.
When we speak to the CEOs and CTOs of London-based AI startups, they are clear and forthright about what help they need: more academic collaborations, which bring such benefit to everyone by spinning research into commercially viable products; better targeted advice tailored to the needs of growing and scaling an early-stage tech business; and, as always, access to funding ranging from angels and VCs to government grants, co-funding, and more. This is, as it happens, exactly what CAP AI provides, and why so many companies from this programme have gone on to succeed.
If ever there was a time to double down on supporting the London AI cluster, this is it.
Image prompt: “flying taxi over st paul’s cathedral art station,” Stable Diffusion.