AI took more than 70% of UK venture funding in the first half of 2026

AI companies took more than 70% of the venture capital that flowed into UK startups in the first half of 2026, according to new figures from PitchBook. UK startups raised £14.4B, about $19.4B, in the six months to the end of June, and more of it went into AI than into every other sector put together. The UK also claimed close to 40% of all the AI funding raised across Europe.

The striking part is not just the scale but the concentration. A handful of large, proven companies are absorbing most of the money, while sectors that used to lead are left short. Fintech, for years the UK’s busiest startup category, had not passed £1B by the end of June, and is running around 75% below last year’s pace. When people say AI is pulling capital away from everything else, this is the shape of it.

The pattern runs through much of what we have covered this year. The chip designer OLIX raised a $312M round we wrote about earlier this month, and the drug-discovery company Isomorphic Labs and the AI-chip startup Fractile are among the other names PitchBook singles out, alongside Ineffable Intelligence, the reinforcement-learning lab set up by a former DeepMind researcher. The government has been trying to steer some of this activity homeward: its £500M Sovereign AI programme named its first backings this month, and a separate £1.1B plan announced in June is aimed squarely at British AI hardware.

Some of the concentration is structural rather than a fashion. Building a foundation model, and especially a frontier model at the leading edge of what AI can do, is extraordinarily expensive, and most of that cost is compute: the specialised chips and data-centre time needed to train and run these systems. That favours companies large enough to carry the bills, which is part of why so much money pools around a small number of names. The open question for the rest of the UK ecosystem is whether that concentration is funding a genuine cluster of world-class companies, or quietly crowding out everything that is not AI.