Today, we have published a new report exploring the AI startup ecosystem. We look at what AI startups perceive as challenges to growth as well as what they want from future regulation.

AI is set to be the definitive technology of the century, disrupting and reforming global economies. The UK already has an incredibly strong AI innovation ecosystem – including an estimated 1400 high-growth AI startups generating more than £1bn in revenue – but it cannot afford to rest on its laurels. Despite the UK’s strength, the AI ecosystem is not without challenges, nor is it immune to damage from regulatory overreach.

Startups by their very nature are created to do things differently and take the sorts of innovation risks corporates are much less likely to. For policy makers this means startups will effectively be the litmus test for AI rules – if AI regulations don’t work for startups, the entire AI sector will suffer.

So following the introduction of the EU’s draft Artificial Intelligence Act (AIA), and with the UK Government due to publish its own AI White Paper, we decided we needed to ask the AI ecosystem – what do you see as your biggest challenges to growth and what do you want from future regulation?

You can find the report in full here.


  • 40% of startups told us data acquisition was their biggest operational cost, 27% told it was data storage and management.
  • 52% of startups told us they expected the lack of availability of datasets to be their biggest barrier to growth over the next five years.
  • 68% of respondents told us they would be either very or somewhat concerned if the UK Government were to introduce a similar high-risk/ low-risk AI categorisation system as the EU’s proposed approach.
  • 77% of startups told us they would be either very or somewhat concerned if the UK were to mandate they share commercially sensitive IP with regulators.
  • 76% of startups told us they had varying concerns about whether getting datasets that are “free of errors”, as the EU looks set to demand, is technically feasible.
  • 76% of startups told us their business model would be either negatively affected or become infeasible if the UK were to echo the EU by making AI developers liable.
  • Startups care about making the best products and services possible, including innovating with ethical AI – only 6% of startups told us they did not factor in ethical considerations during their product or service development.