Higher or Lower - What the UK's Deal Data Says About the Sectors You'd Never Guess

AI raised a record £7.70b in 2025, making it the undisputed Player 1 of UK equity

By now, the AI headline has been well and truly told. In 2025, artificial intelligence companies raised a record £7.70b, accounting for 32% of all UK equity capital deployed and nearly one in five of every deal struck.

The numbers are extraordinary, and the scatter plot in The Deal 2026 confirms what everyone already suspects. AI sits firmly in the upper-right quadrant as one of only 15 industries to record both more deals and higher average values than their three-year average.

But stare at that chart for a moment longer. Because once you stop looking at AI, you start noticing something that has received almost no attention, and it tells a rather different story about where the UK economy is actually heading.

The return of the machines

Quietly, and largely without fanfare, the UK’s physical economy is staging a comeback.

Look again at the top-right quadrant of Figure 1, the consistent overperformers, where both deal volumes and average values are running above their three-year averages. AI is there, yes. But so are Robots & Automation, Manufacturing, Advanced Manufacturing, and Mining.

Robots & Automation saw deal volumes rise by 44% relative to its three-year average, the second-largest surge among all industries.
Advanced Manufacturing saw average deal values increase by 87%. Mining & Drilling posted the single largest increase in deal volumes of any tracked sector, up 50%. And Manufacturing raised £3.98b in 2025, quietly outpacing FinTech (£3.16b) and Pharmaceuticals (£2.26b).

This reflects a broader reorientation toward physical infrastructure, supply chain resilience, and the industrial hardware required to actually deploy AI in the real world. These include the robots, sensors, components and production lines that translate algorithmic ambition into tangible output.

For those keeping an eye on the UK’s Modern Industrial Strategy, this will read as encouraging. The government’s strategic ambitions have long centred on a twin bet: digital leadership and industrial renewal. The 2025 data suggests the equity market is, quietly, making the same wager.

Healthcare lost its save files

If the physical economy is the surprise winner, healthcare is the uncomfortable story nobody wants to tell.

In 2025, pharmaceuticals, life sciences, biotechnology, medical devices, and clinical diagnostics all sit in the lower-left quadrant of Figure 1, recording fewer deals than their three-year averages and lower average values.

The COVID-19 pandemic sent a surge of capital flooding into life sciences between 2020 and 2022, creating an artificially elevated baseline against which subsequent years were always going to look anaemic.

As infection risks eased, investor appetite also eased. Life sciences funds are also notably sector-constrained, unable to pivot into AI the way a generalist VC can, and many are now approaching maturity, compressing deployment capacity.

Now it's your turn

The scatter plot rewards careful reading, but some of its most interesting revelations only emerge when you are forced to guess.

Which raised more in 2025: Tech Consulting or Pharmaceuticals? (Tech Consulting: £3.51b. Pharmaceuticals: £2.26b.) Insurance or Robots & Automation? (Insurance: £3.10b. Robots & Automation: £2.97b, closer than you’d think.) The answers, in almost every case, push back against the narrative gravity that shapes our instincts about where capital flows.

If you think you have a better read on the data than most, I challenge you to beat my high score of 14 in BeauGames: Higher or Lower.

The headline story of UK equity investment in 2025 centres on concentration: fewer deals, higher stakes, capital clustering around the clearest growth prospects. Zoom into the scatter plot, and you get a more precise reading.

The UK is making a dual bet on intelligence and industry, on algorithms and atoms. The healthcare retreat deserves more scrutiny than it has received. But the revival of physical industries alongside AI’s dominance points to something more textured than a simple tech story.