UK AI firms raise record GBP £4.56bn in Q2 funding

UK artificial intelligence companies raised a record £4.56 billion in equity funding in the second quarter, according to Beauhurst. The total accounted for 57% of all UK equity investment by value during the period.

Beauhurst tracked 269 AI fundraising rounds between April and June, accounting for about one in four of the 1,070 UK equity deals recorded across all sectors. The wider market raised £8.01 billion in the quarter.

The £4.56 billion total was 4.1% higher than the previous quarter's £4.38 billion and 186.8% above the £1.59 billion raised by UK AI companies in the same period a year earlier. It made the quarter the strongest on record for UK AI investment by amount raised.

Data compiled from equity fundraisings into UK companies tagged with artificial intelligence also showed that a small number of large transactions accounted for most of the money invested. Eight AI fundraising rounds of more than £100 million made up almost 80% of disclosed AI investment during the quarter.

Those larger rounds included deals by Isomorphic Labs, Ineffable Intelligence, NScale, PhysicsX and Fractile. The figures may rise further as additional unannounced deals are identified through Companies House filings in the weeks and months after the quarter closes.

Sector split

Life sciences and health attracted the largest share of AI investment by value, with 36 deals raising £1.52 billion. That total was driven mainly by Isomorphic Labs' £1.47 billion fundraise.

AI infrastructure, compute, and chips ranked second by value, with £986 million raised, led by rounds involving NScale, Fractile and Quantum Motion. Enterprise software, data and automation followed, with £843 million raised from 27 deals.

Financial services, payments and RegTech recorded the highest deal count among the largest categories, with 64 AI fundraisings in the quarter. Industrial AI, robotics and physical systems accounted for 61 deals and £470 million in funding.

The figures add to evidence that investor appetite for AI businesses remains concentrated, but broad enough to reach several parts of the UK private-company market. Fundraising was spread across life sciences, infrastructure, financial services, advanced engineering and software.

Henry Whorwood gave his assessment of the quarter's figures.

"Q2 was a landmark quarter for UK AI investment. What stands out is not just the scale of capital going into AI, but the breadth of the companies raising. The UK is attracting major investment across life sciences, AI infrastructure, financial services, advanced engineering and enterprise software. AI is now a major driver of the UK private-company market," said Henry Whorwood, Managing Director, Beauhurst Insights.

The research group said the recorded total is unlikely to be final because some equity deals are disclosed only after a delay.

"The headline figure is already a record, but it is unlikely to be the final number. Unannounced fundraising deals often come to light in the weeks and months after a quarter closes, so we expect the Q2 picture to continue developing," said Whorwood.

Recent quarters have seen a sharp increase in AI investment, although the growth pattern has been uneven.

"There has been a rapid increase in investment into AI, with the last two quarters seeing significantly more investment than ever before. Although investment has almost tripled year on year, growth has not been consistent, so there will be a great deal of interest in what the rest of the year will bring. It is also interesting to note that 80% of the total invested into UK AI was raised by just eight AI equity raises, with life sciences and health attracting the most investment by value," said Whorwood.