The UK has come out ahead of the rest of Europe with the highest valued AI sector, coming in at £72.3bn.

According to Tech Nation’s UK Tech in the Age of AI report, the UK ranked first in Europe in terms of AI funding, and £2.67bn was raised by UK AI startups in 2023.

Further, 16% of total UK VC investment went to AI startups in the first quarter of 2024, showing the marked interest in the emerging technology.

Existing companies are also jumping on the AI trend, with one in two using AI to improve their existing product offering.

In Scotland specifically, of the £332m that was invested in tech, £62.8m was invested in AI last year.

According to the report, the UK has 1,800 VC-backed AI startups, and is already home to 20 AI unicorns.

When looking at the tech ecosystem overall, the UK is home to 171 unicorns, and the first quarter of 2024 saw a combined market value of the UK at $1.1 trillion (£860bn).

“The UK tech sector reached a combined market valuation of $1.1 trillion in Q1 2024, a landmark achievement for UK tech and another milestone in our remarkable growth story,” Carolyn Dawson OBE, CEO of the Founders Forum Group said.

UK-headquartered funds reached £39.4bn in the first quarter of 2024, the biggest quarterly fundraise to the sector to date.

This is after UK startups managed to raise £16.72bn in 2023.

All of this has contributed to making the UK tech sector the number one tech ecosystem in Europe, and the third most valuable in the world.

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“There are already encouraging signs in 2024,” Dawson said. “The $50.2b raised by UK-headquartered funds in Q1 2024 represents the biggest quarterly fundraise to date, releasing new, deeper buckets of capital for UK startups.

“84% of UK startup and scaleup founders are positive about the future of UK tech and 69% of tech professionals believe AI will have a transformative impact on the UK economy and country as a whole.

“The UK now has the opportunity to lead the responsible development of AI on a global scale.

“As we look forward, we can be hugely positive about this crucible moment for UK tech.”