The UK's rapidly growing artificial intelligence (AI) startup sector is on track to secure a record-breaking £3.4 billion in venture capital by 2024.

According to recent data from HSBC Innovation Banking UK and Dealroom, AI startups have already attracted $2.1 billion (£1.6 billion) in the first half of the year, a significant portion of the $9.4 billion (£7.2 billion) raised by all UK startups during this period.

This surge is driven by substantial funding rounds, known as megarounds (between $100 million and $250 million) and mega+ rounds (over $250 million). Nearly half of the capital raised in the second quarter of this year came from these major deals, up from 33 percent in the first quarter.

Simon Bumfrey, Head of Technology and Life Sciences at HSBC Innovation Banking UK said: “This data shows that positive trends for investment into the UK innovation ecosystem are manifesting and signs of early optimism are coming to fruition.”

“Investors are becoming increasingly active, unlocking value for innovative UK startups particularly in the area of AI,” he added. “We are hoping to see further large investments into UK AI and other areas, both from foreign and domestic investors as the year progresses.”

Derek Mackenzie, CEO of Investigo said: “As the insatiable demand for AI continues to grow, it’s no surprise that investment funds are targeted towards this game-changing technology. However, far too many companies operating in this space lack the widespread digital skills and talent pipeline to sustain long-term growth, and this has to change. Getting access to digitally adept employees, who are up to speed with the latest AI rules and regulations, is critical for ensuring the technology is deployed to maximum effect.”

Dr Adeshola Cole, CEO, Tritek Consulting said: “With investors placing their bets on the big returns from the surging AI industry, it’s critical to ensure that these investments are targeted to draw in the latest tech talent to take businesses forward. The UK’s skills shortfall means that many fast-growing companies are still struggling to recruit and train the staff they need to accelerate growth, so it’s vital that ambitious companies divert resources to attracting and retaining the latest AI talent to stay ahead of the competition.”