UK Tech Sector Booms to £2.9bn as Peter Kyle Unveils Growth Plan
London, UK – September 3, 2025 – The UK’s artificial intelligence sector has reached a valuation of £2.9 billion, as Shadow Tech Secretary peter Kyle today outlined a plan to further accelerate growth and ensure the UK remains competitive in the global AI landscape. The initiative focuses on easing regulatory burdens and fostering wider regional investment in the technology.
Kyle’s plan comes as Chancellor Rachel Reeves voiced support for reducing “burdensome red tape” to attract investment and stimulate economic growth. The government aims to build on recent expansion of the AI ecosystem beyond London, with the number of AI firms in regions like the Midlands, Yorkshire, Wales and the North West having at least doubled in the last three years.
“This country has huge potential, but our economy has been stuck on pause for too long,” Reeves stated, highlighting the urgency of the growth strategy.
While momentum is building, analysts caution that challenges remain. Helena Sans, head of tech, media and telecoms at Barclays Corporate Bank, recently noted that “access to funding, global investor appetite and risk-taking remain the biggest hurdles” despite growing confidence in the UK’s tech base. Concerns have also been raised regarding the pace of regulatory reform, with the Ada Lovelace Institute previously warning of a potential “legislative void” in areas like facial recognition and AI oversight.
Kyle argues the regional expansion demonstrates the UK’s potential to establish AI as a national growth story, extending beyond its conventional London focus. Though, observers emphasize that sustained investment and a proactive regulatory framework will be crucial for the UK to maintain its competitive edge against the US, EU, and China, all of whom are rapidly scaling their AI capabilities.
