Photo by Parmy Olson
Don’t mention Brexit. London Mayor Sadiq Khan on the sidelines of the launch of London Tech Week on Monday 11 June at the Francis Crick Institute in London.
London might be tussling with Uber over its taxi license and grappling with Brexit, but it wants you to know that it’s still a major hub for artificial intelligence. On Monday the city’s Mayor, Sadiq Khan, promoted a survey he’d commissioned that suggested London was the “capital” of AI for Europe.
“London has twice as many AI companies as Paris and Berlin combined,” Khan said on the sidelines of the launch of London Tech Week, a collection of 200 tech events across the city that also kicked off on Monday. (Disclosure: Forbes is the festival’s official media partner.)
Khan denied his transport office was smothering innovation by moving to take away Uber’s taxi license last year. “We’re not saying ‘no’ to innovation, but ‘no’ to rule-breaking,” he said.
Khan’s AI report was pulled together by CognitionX, a London-based AI advice service. The report found that investment into “AI companies” in London had exceeded £200 million in 2017, a year-on-year increase of more than 50%.
That represented about 10% of the £2.45 billion ($3.3 billion) raised by London tech firms last year. The most popular sectors for AI companies in London were finance, insurance and law.
The numbers are impressive but should be taken with a pinch of salt as CognitionX maintained a broad definition of an AI company, or “AI supplier.” It identified 758 such companies in London, 645 of which had headquarters in the capital. Each company was included because it sold “at least one AI product.”
As such the the report included companies that you might not normally associate with AI, including Starship Technologies and Babylon Health—the first makes self-driving delivery robots and the other is a telemedicine service that includes an automated symptom checker.
The report was also generous in including companies that carried out AI research, but didn’t sell any AI-related products or services, and companies whose AI-related product was on the “borderline” of the definition of AI.
Large businesses are increasingly being encouraged to incorporate AI into their services, and it’s becoming easier to do so thanks to off-the-shelf machine-learning tools they can license from cloud providers like Google Cloud (TensorFlow) or Amazon Web Services (Sage Maker and DeepLens).
The big AI showcase may be down to pressure on Khan to show that London is very much open for business and cutting-edge technology, despite the central government’s dithering over a Brexit deal with the European Union.
“London’s unique global status as a capital of finance, business, government and technology is our standout asset,” he said, adding that this wasn’t going to change even after Brexit.
But even the prospect of Brexit has already had some impact. It led the European Investment Fund (EIF), for instance, to halt nearly all its funding for startups in the U.K., which was being funnelled through venture capital firms here and was an important source of capital for tech entrepreneurs.
One VC firm here recently told Forbes that the EIF had pulled out of taking part in their funding at the 11th hour because of Brexit. And while the British Business Bank had pledged to pick up the shortfall, it had moved more slowly that the EIF.
Brexit’s obvious impact on the financial sector could also be having knock-on effects on startups. For example, many startups in the country have raised money from wealthy bankers through the Enterprise Investment Scheme in return for tax breaks. But with banks poised to move more staff to the Europe Continent, that well of funding could also start to dry up.
Paris is one city that’s trying its hardest to usurp London as the startup capital of Europe, and it is making headway. The city was ranked over London for the first time as Europe’s most attractive destination for foreign direct investment in 2017, according to a survey on European attractiveness by Ernst & Young, which was also released on Monday. (See our recent cover story: “France’s Big Pivot.”)
Khan is meanwhile following a trend among governments to put their full weight behind artificial intelligence—despite all the doom-mongering about job destruction.
French President Emmanuel Macron in March announced his government was investing $1.5 billion into cultivating artificial intelligence in France, while a month later, the British government led by Theresa May announced a flurry of public-private partnerships related to AI that it said were worth more than £1 billion ($1.3 billion).
In the race to promote big numbers and big commitments around hard-to-understand technology, the definitions of artificial intelligence and investment “partnerships” have loosened somewhat, and such announcements risk verging on sounding like hot air.
What will matter over time is the extent to which such AI companies, like the legal documents analyzer Eigen Technologies, which just raised £13 million ($17.4 million), can find profit in the markets they are turning upside down.