UK AI sector growing rapidly despite consumer disconnect

Anne Freer | November 29, 2023

App Business

In the year since ChatGPT’s launch, the UK’s AI sector has experienced substantial growth. The number of newly established companies using ‘AI’ in their names has more than tripled, rising to 1,284, which represents a significant 202% increase.

AI companies popping up all over the UK

A recent study by media company Hard Numbers examining data from UK Companies House to quantify the expansion of the AI sector following the introduction of ChatGPT, found that London has emerged as the primary hub for AI innovation, hosting nearly half of the new AI companies.

Out of the 1,284 new AI firms since ChatGPT’s launch, 625 are based in London, surpassing other cities by a considerable margin.

Manchester, the second-largest centre, is home to just over 3% of London’s total, highlighting London’s predominant role in AI innovation compared to cities like Cambridge and Oxford.

In the 12 months leading up to November 30th, 2022, there were 425 companies incorporating ‘AI’ in their names.

Source: Hard Numbers

“This data paints a clear picture: we have officially entered the fifth phase of the industrial revolution,” said Paul Stollery, Co-Founder and Creative Director of Hard Numbers. “The impact of AI will be as profound as that of any great technology to have come before it – from the first revolution of mechanisation and steam power, to the fourth, ushered in by the internet.

And yet, consumer demand and interest in AI aren’t going hand in hand with the trend.

Consumers aren’t interested in using AI

A report from Storyblok recently found that more than four in five (85%) consumers aren’t interested in using AI to help them decide on purchases.

Three in five respondents said that if they were presented with an AI recommendation, it would not increase their likelihood of making a purchase. And 17% expressed that AI recommendations would actually decrease their inclination to buy.

The study also sheds light on other aspects where consumers may not be up to date. A majority (43%) of consumers find the greatest value in a company’s website, while fewer value mobile apps (34%) and social media accounts (16%).

Interestingly, despite the clear preference for websites over mobile apps, seven out of ten consumers reported that they predominantly shop using their smartphones. This underscores the importance of having a mobile-optimised website.

Discussing these consumer trends, Storyblok CEO Dominik Angerer remarked that brands sometimes fall into the trap of chasing the latest trends instead of delivering what consumers truly desire. As indicated by the survey results, consumers prioritise authentic content and user-friendly websites during the holiday season.

Key takeaways

  • In one year, UK added 1,284 new AI-named companies, a 202% rise, but consumer interest in AI lags
  • London dominates AI innovation with 625 new firms, highlighting its leadership in the sector
  • Over 85% of consumers show no interest in AI for purchase decisions; websites hold more value than mobile apps or social media

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