AI: Is Britain Taking Center Stage?

On your mark… get set… innovate! The release of ChatGPT was the starter’s pistol heard around the world, signaling a race between nations for AI supremacy. So far, the US appears to be the current favorite, with Silicon Valley home to deep-pocketed investors and a seemingly endless string of talent. But there’s another contender not far behind: the UK.

A combination of a light-touched government and an aggressive private sector has quietly put the UK on the map in one of the world’s most important industries. Just earlier this year, Downing Street released a white paper outlining a “pro-innovation” regulatory approach, avoiding legislation that might stifle early-stage business growth. Meanwhile, the number UK AI companies has reportedly increased by 688% over the last 10 years, making UK AI market the third largest after the US and China. In contrast, the EU’s AI Act has been relatively restrictive, slowly its gains.

Of course, no one is suggesting that Silicon Valley will be replaced. And experts say the UK has a limited time period both to grow and to attract enough talent. “The window is shortening,” says Jake Gordon-Clark, Korn Ferry’s Professional Services sector leader for EMEA.

Still, the speed of the shift has taken some tech pros by surprise. Microsoft-co-owned OpenAI (which in turn owns ChatGPT) just announced that its first international office will be based in London, where Google DeepMind is already located. The city is now home to the two firms that own the lion’s share of the market. “The UK could well become one of the prominent world capitals for AI technology and talent,” says Vinay Menon, Korn Ferry senior client partner and global lead of its AI practice.

Still, the country’s jump on other countries won’t last given how critical AI has become, experts say, and already there are signs of talent problems. Last year, a reported two in three British IT decision-makers claimed to have experienced a talent shortage. Experts say UK firms are increasingly looking overseas, with one survey showing that 38% of IT leaders expect to use offshore talent this year. Much of that has come from India but the pendulum could swing. “Indians don’t necessarily need to travel to progress their career in the same way that they might have done previously,” says Gordon-Clark.

Experts say Britain may also face growing fears around AI in the labor market. “A lot of jobs have been put on the line because of it,” says Phoebe Hitchcock, a principal consultant in Korn Ferry’s Technology practice. That could affect the country’s stance on regulation. Indeed, Labour Leader Keir Starmer has recently stated that a Labour-led government would apply stricter regulation.

Still, experts say that for now, the country has the right balance. David Power, a principal consultant in Korn Ferry’s Global FinTech, Digital Assets and Blockchain practice, says he is hoping the country has learned some lessons of past, when increased regulation squashed the decentralized dream of the crypto industry. "AI has all of the excitement the crypto market had when it came to the world,” he says.

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