New research from The Alan Turing Institute has found that UK-based, women-led artificial intelligence (AI) startups are being left behind when it comes to investment, despite the influx of cash.

The national institute for data science and AI’s latest paper, Rebalancing Innovation: Women, AI, and Venture Capital in the UK (Second Report), analysed the venture capital (VC) put into AI startups by sector.

It discovered that the gender gap in the AI software subsector is particularly evident, with only 0.7% of the total capital invested since 2010—which amounts to £10.5 billion—being awarded to startups led by women.

What’s more, women-led companies account for only 4% of the total number of startups in the subsector, compared to the all-male founding teams which make up 78% of firms, and who have raised 77% of the total capital invested.

The new report builds on prior work undertaken by the research team, who found that across all AI sectors, the average capital raised per deal by a female-founded AI company is 6x lower (£1.3m) than the average capital raised by all-male founding teams (£8.6m).

Also underscored in the first report was the extensive gender disparity of VC firm decision-makers investing in AI: 95.5% of VC firm decision-making teams are majority male, 1.8% have equal representation, and just 2.7% are majority female.

In response to the collected findings, the researchers are recommending that investors ringfence capital for women and underrepresented founders working in AI.

Furthermore, they suggest that it should be mandatory for investors to collect and report their diversity data—not least when investing in new technologies. This could involve enforcing VC firms to sign the Investing in Women Code, where signatories are required to do so.

The authors also propose that the government—and other funding bodies—instil a culture of co-investment, and establish mentoring communities and syndicates for women in tech as to provide mentorship, education, and networking opportunities.

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Dr Erin Young, who’s a research fellow at The Alan Turing Institute and also a report author, commented on the collective findings: “We’re concerned that women-led startups are being left behind, and it’s particularly worrying in large sectors with high investment and little gender diversity like AI software.

“This sector is booming, experiencing enormous investment but almost all of the capital invested is being awarded to businesses founded only by men.

“Policy reform must focus on the inclusion of women and under-represented groups in this space to have tangible impact on equity and innovation.”

Professor Helen Margetts, director of the public policy programme at institute, further remarked: “The lack of gender diversity in technology, and specifically in AI, constrains the wide variety of perspectives needed to encourage innovation.

“This important research shows there’s a lot of work to be done but prioritising gender diversity is crucial to ensure we have a well-rounded and versatile economy.”