Building an AI superpower: can it lead an economic recovery?
Opinion: Artificial intelligence is helping the UK to punch well above its weight on the world stage. Kao Data’s business development director, Tom Bethell, explores the start-ups turning Britain into a global technology leader, and the ethical and regulatory challenges AI faces before it can become the country’s financial saviour
Not only is the UK attracting record funding via AI, but its success has pushed the UK to the top of the 2022 world rankings for private AI investment and Cambridge ranks alongside London as the UK’s leading hub of AI activity.
This good news may come as a surprise amid headlines about continued economic downturns, the threat of recession, and layoffs in tech and communications industries, many of which are blamed on AI replacing human co-ordination. A perfect storm of factors including Covid, Brexit and Ukraine led to a sharp downturn in 2022, with news of big-tech layoffs now setting the sector's nerves on edge.
Amid this doom and gloom, however, AI is booming. The UK government's 10-year strategy to make the country “the world's best place to live and work with AI” is now well under way. Together with the government’s renewed £1billion pledge for the next generation supercomputing and AI research, AI start-ups are attracting billions of pounds of investment from the private markets.
The UK has always been an AI superpower
We shouldn't be too surprised to see the UK leading the world in AI. This is, after all, the nation that gave the world Turing, Lovelace and DeepMind, which is now the world's leading force in machine learning.
Even so, it is a genuine thrill to see British AI flying so high, with homegrown AI start-ups such as Octopus Energy whose proprietary entech platform, Kraken, uses advanced data and machine learning capabilities to automate the energy supply chain, empowering customers to access power when it is cheaper and greener. There’s also Babylon Health and Graphcore, who is collectively attracting more investment than any government initiative can hope to match.
While the USA and China remain the world frontrunners, The Global AI Index 2022, the first index to benchmark nations on their level of investment, innovation and implementation of AI, ranks the UK the third global leader.
The UK, for example, is currently home to a third of Europe’s total AI companies, and ranks first in Europe and third in the world for private venture capital investment in AI, with Singapore, South Korea, Japan and Germany trailing behind us.
Such is the global success of UK AI that the sector is widely acknowledged as a potential saviour amid the current economic downturn. This isn’t just down to the inward investment that AI is attracting, but also because the technology itself has such a positive impact on growth and innovation in areas from drug discovery to supply-chain logistics.
According to PwC, UK GDP will be 10.3 per cent higher in 2030 “as a result of AI” – the equivalent of an additional £232bn, and McKinsey predicts that AI will deliver an extraordinary 22 per cent boost to the UK economy by 2030.
Little wonder, then, that enterprise business leaders are eager to adopt AI models and algorithms. Recent research found that 54 per cent of business decision-makers describe AI’s likely impact as “transformational”.
Arm, the Cambridge-based UK chip manufacturer, is just one example of the UK’s world-leading tech industry. Its processor technologies are integral to many of the world’s leading supercomputers, and it remains a pre-eminent provider of CPU, GPU and NPU (neural processing units) architectures – all of which are the chosen platforms for a plethora of AI-specific applications.
Public and private support for AI growth
The economic and strategic power of AI has given politicians a glimpse of a brighter future. The UK government is now two years into its 10-year National AI Strategy, which focuses on investment, governance, and economic transition to create “an AI-first economy”.
The government claims it’s fast off the starting blocks on investment, with more than £2.3billion going to a range of AI initiatives since 2014. In recent years, however, private investment has forged far ahead of public investments, with Octopus Energy alone attracting £445million in a single funding round last year.
Our educational establishments, too, have made the UK extremely attractive for AI investment. Large numbers of British universities and research institutions produce graduates with expertise in AI and associated technologies, and our research institutes demonstrate a leading focus on AI research and development.
According to EduRank, four of Europe's top five universities for studying AI are in the UK – including Cambridge University – and London is now the main European hub for AI development.
Bumps in the road
Despite all this talent and activity, the UK faces hurdles on its path to full AI superpower status. Firstly, investment. This may be one of the three key pillars of the government's 10-year strategy, but experts don't believe that the funding proposals go far enough.
Recent public investments include £23million for up to 2,000 AI scholarships across England.
This is a fraction of the private investment being brought into the UK by AI start-ups.
To achieve AI adoption on a global scale will require a public-private partnership, and the government's contributions will need to be much larger if it is serious about positioning the UK as a leader in AI. This is even more vital given recent announcements by the Department for Science, innovation and Technology to invest £800million in a new UK supercomputer, and its plans to leverage the UK Science and Technology Framework to make the country a world-leader in tech by 2030.
Governance is another key pillar of the UK's AI strategy, and another potential hurdle for businesses. Difficult decisions must be made when balancing the opportunities of AI with its potential drawbacks.
UK AI regulations are very much a work in progress, but it's clear that they will focus on maintaining consumer confidence, as outlined in the AI Regulation Policy Paper.
Even without the ethical debate over AI's functions, access to sufficiently large datasets is a technological challenge. Industrial scale, high-performance infrastructure designed and hosted by organisations such as ourselves at Kao Data is needed to securely store, process, and provide access to the sheer volume of data that will give UK AI a competitive edge. Unfortunately, however, the UK remains a long way behind the US and China when it comes to building this machinery.
Ultimately, the government's 10-year plan is a welcome starting point, but new investments and incentives are still needed to make the UK into an AI force to be reckoned with.
Areas such as high performance computing (HPC), 5G, hollow core fibre implementation, edge computing and cybersecurity must all be improved to enable the kind of superfast data collection, processing and transfer, which, in turn, will allow AI models to be adopted and deployed at-scale.
Looking forward, there’s no doubt that the vision, ingenuity, and technological prowess of start-ups across Cambridge, the UK Innovation Corridor, and beyond will be vital to turn the government's AI ambitions into reality.
Personally, I’m excited to see how artificial intelligence will continue to drive disruptive change for business and industry, and to provide high performance support from our campus in Harlow.
Celebrating start-ups at the Cambridge Independent Science and Technology Awards 2023
Kao Data was the proud sponsor of the Start-up of the Year category at the Cambridge Science and Technology Awards 2023, the winner of which was Maxion Therapeutics – a biotechnology company specialising in the development of novel biologic medicines for ion channels and GPCRs, critical cell surface proteins involved in a wide range of untreated or poorly-treated diseases, including autoimmune conditions and chronic pain.
Located at the gateway to the UK Innovation Corridor between London and Cambridge, and among a plethora of cutting-edge artificial intelligence (AI), biotech, life sciences and pharmaceutical start-ups, Kao Data’s multi-award-winning, high performance infrastructure platform houses some of the UK’s most advanced high-performance computing (HPC), AI, and supercomputing workloads.
They include NVIDIA’s Cambridge-1, the UK’s fastest and most powerful supercomputer, start-ups such as InstaDeep, a global leader in AI-powered decision-making for enterprise, and Speechmatics, the leading speech recognition technology scale-up, providing highly accurate speech-to-text to global enterprise businesses.
