In just over a year, AI funding went from explosive to cautious optimism. After the staggering $108 billion poured into AI startups in 2024, 2025 has shown the emergence of a new pattern.

AI startups in the UK are raising billions in funding, yet there’s a startling gap between capital and real-world impact. Recent studies reveal that only one in seven UK AI companies are working towards solving actual market or societal problems. Given that there are more than 3,000 AI firms operating in the region, it feels appropriate to ask – what’s going wrong?

Over the course of 2024, the interest in gen AI has spread like wildfire. Data from McKinsey indicates that while AI adoption among organisations stayed at around the 50% mark for six years, the past year alone saw it jump to 72%.

Artificial intelligence is undoubtedly becoming the new black. We are seeing how numerous businesses across the world are racing to win in the AI game by inventing their own solutions or integrating existing ones in operations. But here’s the twist.