Expanding business is often a challenge in the country, experts told MPs (Akshaya Asokan)asokan_akshaya) • October 29, 2024 Image: Shutterstock
Britain’s reliance on foreign capital to invest in artificial intelligence will hinder the country’s technological progress, a parliamentary committee heard on Tuesday.
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Erin Platts, CEO of HSBC Innovation Banking, spoke to the Communications and Digital Committee on the challenges of scaling up AI businesses domestically, saying around 70% of UK tech investment is overseas. He said it comes from. Nearly 42% of that is from the United States. What the UK currently lacks is “capital depth”, he said.
“AI is one of the most exciting transformative sub-sectors for us, but we need to ensure that domestic capital We need to think about how to release them,” Platts said at the committee’s inquiry on Tuesday.
Michael Holmes, chief executive of venture investor Scale Space, said a lack of capital was making it difficult for British companies to expand.
“The general feeling is that UK-based VCs are probably more risk-averse than US VCs. So if you are UK-based and want to scale a business, they are going to go where the money is. But frankly they won’t. It doesn’t matter if it’s British-owned or American-owned. They just need to survive,” Holmes said.
James Wise, a partner at Balderton Capital, said that although British venture-backed AI companies have raised only 10% of US AI companies this year, the country’s AI market continues to grow steadily. Point out.
According to a research firm, the UK AI market is currently worth $92 billion. Technology industry body TechUK estimates that AI could boost the UK’s gross domestic product by up to 10.3% by 2030. The newly elected UK Labor government sees AI as a driver of the country’s innovative growth.
The solution to addressing capital issues and scale-up challenges is to bring in more international talent, which could play a pivotal role in supporting the UK government’s expansion of the AI market. Platts added that there is.
“There are gaps locally, whether it’s capital or talent, but I think there’s an opportunity to aggressively attract innovative companies and talent that will drive incredible growth domestically,” Platts said.
At Tuesday’s hearing, lawmakers expressed concerns about the acquisition of British AI companies by American tech giants, but Wise said these acquisitions should not be viewed with skepticism.
“A lot of those companies are investing here, and those companies are investing here. So with some of those companies opening offices here and investing in research here; It will have a knock-on effect on the local economy in the UK,” Mr Wise said.
Alex Kendall, CEO of self-driving startup Wave, said the main reason there is an AI talent shortage is because of Silicon Valley, where large companies produce the next generation of leaders and leaders who can mentor companies. He said this is because the UK lacks such an ecosystem.
“I think if we can bring this kind of talent to the UK, it will really help create great companies, so that those companies not only generate ecosystem benefits, but also that they can be reinvested. It can be capital or the company itself can help invest,’ and support the next generation of businesses,” Kendall said.
