Nscale and ElevenLabs power £41bn AI boom as Britain cements unicorn crown

Britain's AI sector has more than tripled in value to £41bn in a year, driven by firms like Nscale (£11.3bn) and ElevenLabs (£8.5bn), as the UK cements its position as Europe's leading startup hub with 70 unicorns worth £228bn. However, the report warns that the UK struggles to keep startups independent and list them publicly, with only two IPOs this year versus 35 in the US.

Nscale and ElevenLabs power £41bn AI boom as Britain cements unicorn crown Britain’s AI sector has more than tripled in value in just a year, with fast-growing firms including Nscale and ElevenLabs now worth a combined £41bn as the UK strengthens its position as Europe’s leading startup hub. New research from the Hurun UK Unicorn Index shows the country’s nine AI unicorns have surged to a combined valuation of more than £40bn, driven by AI infrastructure heavyweight Nscale, now worth £11.3bn, and voice technology firm ElevenLabs, valued at £8.5bn after another year of breakneck growth. AI has overtaken fintech as Britain’s fastest-growing area of private firm creation, even as questions mount over whether the UK can keep its most valuable startups independent long enough to reach the public markets. The broader index found the UK is now home to 70 unicorns – privately-held companies valued at more than $1bn – worth a combined £228bn, up 47 per cent over the past year, pushing Britain ahead of India to become the world’s third-largest unicorn nation behind only the US and China. The UK’s AI surge has been led by Nscale, the London-based AI infrastructure firm that has emerged as one of Europe’s biggest bets on sovereign computing capacity. The company has raised billions of dollars in financing over the past year, recruited former Meta chief operating officer Sheryl Sandberg and ex-deputy Prime Minister Nick Clegg to its board https://www.cityam.com/uk-is-of-marginal-relevance-nick-clegg-dismisses-sovereign-ai-push-as-dishonest/ , while positioning itself as one of Europe’s leading providers of AI compute. Meanwhile ElevenLabs has rapidly become one of Britain’s breakout AI successes. The voice AI company has signed enterprise customers including Deutsche Telekom, Revolut and Klarna, surpassed $500m in annual recurring revenue and attracted investors including BlackRock, Nvidia, Salesforce Ventures and Deutsche Telekom. The UK builds unicorns – but can it keep them? However, the report warns Britain’s biggest weakness remains turning promising startups into listed global techchampions. Only two UK unicorns floated this year compared with 35 in the United States, while domestic pension funds continue to allocate just 0.007 per cent of assets to venture capital, well below the 0.5 to two per cent typically invested by North American peers. That funding gap increasingly leaves British founders reliant on American capital at the point companies need billions rather than millions to scale. US technology giants are also intensifying the battle for Britain’s AI talent, with some London machine learning roles reportedly offering salaries of up to £630,000, making it harder for domestic startups to compete for experienced engineers. A growing number of promising British AI firms have also been acquired before reaching public markets, prompting concerns that Britain continues to create globally leading tech while overseas investors capture much of the long-term value. Rupert Hoogewerf, chairman and chief researcher at Hurun Report, said: “The UK has cemented its position as Europe’s undisputed unicorn capital. With 70 unicorns worth nearly £230bn, Britain now has more billion-dollar startups than Germany and France combined.” “The UK cannot take its position for granted”, he added. “The moment Britain becomes less welcoming to international talent, or undermines the ecosystem that has been built, the unicorns will go elsewhere.” The report comes as ministers continue pushing pension funds to back more high-growth British companies through the Mansion House reforms, with firms including Wayve and Elevenlabs already receiving investment from the UK’s first pension-backed venture capital fund. The research also highlights how quickly fortunes can reverse in the AI sector. Stability AI, once regarded as one of Britain’s flagship AI companies, has dropped below the unicorn threshold after its valuation fell beneath $1bn. Elsewhere, payments firm GoCardless has exited the rankings following a valuation markdown, while BrewDog left the index after being sold to Tilray Brands for a reported £33m = a fraction of its previous £1.5bn peak valuation. Looking ahead, Hurun estimates Britain could host around 120 unicorns worth more than £460bn within a decade if it maintains policies that continue to attract international talent, encourage venture capital investment and support founders through to IPO.