What is Artificial Intelligence?

For a while artificial intelligence (AI) seemed like an unbelievable sci-fi concept you’d only see in films. But now we use AI in our everyday lives – you could be using AI without even realising it.

Some of us might’ve expected this (Alan Turing certainly did) but it’s still astounding how far we’ve come in just a few short years. There are constantly new products and tools being developed — it’s hard to keep up. And we all want to be at the forefront of change.

This quarter we’ve seen the highest investment into AI that we’ve ever seen, with a huge £1.1b being invested into AI companies so far. This is up from £508m in Q1 2024, showing great promise for AI growth this year — and even more change.

We’ve put together this article to give you the rundown of all things AI and to showcase the biggest AI companies in the UK right now.

What is artificial intelligence (AI)?

AI, or artificial intelligence, refers to the intelligence demonstrated by machines, especially computer systems.

This is what ChatGPT said about AI:

“Artificial Intelligence (AI) is a branch of computer science that focuses on creating systems capable of performing tasks that typically require human intelligence. These tasks include learning, reasoning, problem-solving, perception, language understanding, and decision-making.”

What’s the difference between AI and machine learning?

AI and machine learning are related concepts but they are not the same.

AI is a broad field of computer science aimed at creating systems capable of performing tasks that require human intelligence, such as reasoning, learning, problem-solving, perception, language understanding, and decision-making.

It encompasses a wide range of technologies and approaches, including rule-based systems, expert systems, natural language processing, robotics, and machine learning.

Machine learning, or ML, is a subset of AI. It’s focused on developing algorithms and statistical models that allow computers to learn from and make predictions or decisions based on data. While AI includes approaches that do not involve learning from data, such as rule-based systems, ML specifically involves creating models that can learn and adapt from data inputs.

How different types of AI work

AI can be used in different ways, and for different reasons. For example, you wouldn’t use ChatGPT to drive your car but you could use both ChatGPT and Siri to write your shopping list. The difference is that Siri wouldn’t be able to create a shopping list from scratch (yet), whereas ChatGPT would. Let’s take a look at the different types of AI and what they’re commonly used for.

Key benefits of artificial intelligence

In films and TV, AI is used for all sorts of things: robots that clean your house, unstoppable assassins, artificial intelligence police forces.

But what are the real-life key benefits of artificial intelligence?

• Automate mundane tasks that humans typically don’t enjoy doing
• Reduce the possibility of human-error
• Manage big data effectively and efficiently
• Streamline workflows and processes
• Perform tasks that could be dangerous for humans
• Always on — AI is available 24 hours per day

As an example, AI is particularly useful for the medical industry. It can help improve the accuracy and speed of analysing medical images and detecting abnormalities. It can also predict patient outcomes and disease risks, enabling early interventions and preventive measures.

By customising treatment plans based on genetic analysis and patient history, AI can find the right therapy for patients. In robotics and surgery, AI can improve surgical precision and assists in pre-operative planning — and it streamlines administrative tasks, manages electronic health records, and organises scheduling.

Artificial intelligence market analysis

From our artificial intelligence market analysis, it’s clear that the AI industry has been growing significantly for the past decade and it shows no signs of slowing down.

As you can see from our graph above, the amount of money being invested into AI is at a record high. In Q2 of 2024, we’ve already seen £1.1b of equity funding secured by AI companies.

We can see from the data that there’s not a similar surge in the number of deals being made; in fact the number of deals appears to have dipped significantly. So we can conclude that the deals being made are bigger.

Digging deeper into the data, a large portion of the total amount raised (55.4%) is going to seed companies, with a further 33.9% going to venture stage companies — worked out by number of deals made. This shows that a large portion of these companies are startups and scaleups — and we could see more growth from these companies in the near future.

A number of these companies are emerging from the golden triangle (Oxford, Cambridge and London) as they are academic spinouts. Looking at our data, 3.6% of the companies we looked at for this article spun out from a university, and 52.2% of those companies come from the golden triangle.

Industries AI is transforming

There are some industries in particular that AI is changing. As we mentioned before, it’s been a game-changer for the medical sector.

But AI is also transforming a wide range of industries beyond healthcare, driving innovation, efficiency, and new capabilities. Here are some key industries being revolutionised by AI:

Finance and banking
AI is enhancing fraud detection, risk management, and customer service in the finance sector. It enables predictive analytics for stock trading, automates customer support through chatbots, and improves credit scoring and loan approvals.

Retail and e-commerce
Probably one of the most evident ones is retail and e-commerce, as so many of us use online shopping platforms. AI personalises shopping experiences by analysing customer behaviour and preferences, showing you products you’re likely to want to purchase. It powers recommendation engines, optimises inventory management, and enhances customer service with virtual assistants.

Manufacturing
AI-driven automation and predictive maintenance are transforming manufacturing processes. AI improves quality control through real-time monitoring and analysis, enhances supply chain efficiency, and enables the development of smart factories with robotics.

Transportation and logistics
AI can organise route planning and fleet management, reducing costs and improving delivery times. It enhances the development of autonomous vehicles, improves traffic management systems, and streamlines warehouse operations with robotics and automation.

Education
AI is even changing how we learn, providing personalised learning experiences and adaptive learning platforms that cater to individual student needs. It also automates administrative tasks, offers intelligent tutoring systems, and enhances educational content through data analytics and natural language processing.

Entertainment and media
AI has been a game-changer for entertainment platforms such as YouTube and social media sites like TikTok. AI creates personalised content recommendations on these platforms and enhances content creation through tools like automated video editing and music composition. It also improves audience engagement through targeted advertising and sentiment analysis.

Energy
AI helps optimise energy consumption, and enhances the efficiency of renewable energy sources. It enables predictive maintenance for energy infrastructure, improves grid management, and supports the development of smart grids and smart home technologies.

Agriculture
AI-driven precision farming techniques increase crop yields and reduce waste. AI-based agritech applications include drone monitoring, soil analysis, weather prediction, and automated irrigation systems, enhancing overall farm management and productivity.

AI is driving significant advancements across various industries by enhancing efficiency, improving decision-making, personalising experiences, and automating routine tasks. Its transformative impact is reshaping how businesses operate, and is likely to make even more big changes in the future.

On our platform, you can dig into the artificial intelligence verticals to see which industries are included in this space. As you can see from our data, application software tends to be the most popular industry — but this can cover a wide range of fields.

If you want to look even further, you can add industries to your search. For example, if we add artificial intelligence, application software and fintech to our advanced search, we can now see 180 companies. From here, you can filter by latest or total fundraisings, turnover, industries and more.

The biggest AI companies in the UK

Below, we’ve highlighted the top AI companies in the UK by equity raised as of 12 June 2024.

How to find emerging AI companies in the UK

Using the Beauhurst platform, you can find insights into emerging companies and industries.

There are several different ways you can do this. If you want to find out more on AI as a whole, you can do this from the Explore section of the Beauhurst platform. Here you can search by industry (or by location).

For example, using the Beauhurst buzzword ‘artificial intelligence’, you can see:

• How company foundations in this industry have changed over time
• The top locations for AI companies
• All fundraising activity and the top artificial intelligence funders
• IPOs and acquisitions across AI
• MBOs, grants, and more

To find emerging AI companies, you can perform a simple advanced search check.

If you want to see early-stage or emerging companies, there are a number of ways you can narrow down your search. In this example, we’ve narrowed our search to look at companies with nine or fewer employees. But you could also search for companies founded in the past couple of years, or that have raised under a certain amount of funding.

You can also add multiple criteria. In this instance, we’ve added that the company needs to have received funding in the past six months — so, you can see companies that are currently receiving funding.