Artificial intelligence (AI) is catalysing a wave of innovation among the UK’s high-growth businesses, according to Charles Stanley, with 35 per cent of business owners and entrepreneurs planning to harness the technology in new business ventures.

Nearly two-thirds (63 per cent) of business owners think the tech revolution will be spearheaded by entrepreneurs.

This is reflected in current usage as start-ups are more likely to be incorporating AI into their professional life (56 per cent) than those who inherited a family business (43 per cent).

Analysis from Beauhurst for Charles Stanley indicated that AI had a positive impact on business’ prospects of securing equity investment.

As at May 2024, there were 2,693 AI companies in the UK, 1,955 (73 per cent) of which had received equity investment worth £15.2bn.

While the value of equity investment in AI firms peaked in 2022 at £3.28bn, investment amounts fell in 2023, although this was in line with what was seen in the high-growth tech industry and deal numbers remained consistent, Charles Stanley noted.

Furthermore, the high investment amounts in 2021 and 2022 were partly driven by the economic stimulus measures introduced to help companies recover from the Covid-19 pandemic, and reflected investors’ interest in taking a stake in the emerging sector, the firm added.

Nearly two-thirds (63 per cent) of business owners believed AI was an opportunity for their business, while 17 per cent viewed it as a threat.

Most (63 per cent) business owners felt AI will improve productivity and efficiency, while 60 per cent saw it driving profits.

Larger firms were more confident in AI’s ability to help them boost productivity than smaller firms and sole traders.

However, there is some apprehension towards AI, with a quarter (25 per cent) of leaders considering exiting or selling their business as a result.

“Entrepreneurship drives innovation, and the emergence of AI offers significant opportunities for businesses to propel in their sectors for those who can identify new ways to apply the technology,” commented Charles Stanley director of private clients, Louis Coke.

“The growing confidence business leaders have in AI is evidence of its potential, as an investment and its use in both the public and private sphere to bolster productivity and efficiency.

“As entrepreneurs and owners navigate the evolving climate of AI and its implementation in business endeavours, Charles Stanley remains committed to supporting them at every stage of their journey.

“From wealth management and integrated client service to financial planning, it is imperative businesses are well-prepared and equipped in their processes to take on novel but fruitful ventures for the enrichment of the British economy.”

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