"Artificial intelligence is emerging as a key driver of growth in the UK's climate tech start-up ecosystem, with AI-related ventures attracting record levels of funding even as broader climate investment stalls, according to new research by Sustainable Ventures. The study, titled "Advancing AI's Potential for Climate Innovation", draws on data from 3,345 high-growth UK climate tech start-ups compiled by Beauhurst and includes qualitative insights from founders, investors and academics."
"Sustainable Ventures found that 9.7% of UK climate tech start-ups are now AI-related - more than double the national high-growth start-up average of 4.6%, and higher than the financial services sector (6.9%). The proportion of AI-enabled climate ventures has risen by an average of 17% per year over the past five years, underscoring AI's expanding role in the UK's net zero transition."
Artificial intelligence is driving growth in the UK's climate tech start-up ecosystem, with AI-related ventures growing to 9.7% of climate start-ups and receiving 40% of investment in 2024, up from 20% in 2022. AI-enabled climate ventures increased by 17% per year over five years. Software-led start-ups captured £2.19bn in 2024 (64% of funding) and £1.3bn of AI capital. Hardware-led ventures saw funding fall 22% to £1.25bn in 2024, received only £90m of AI investment, and their share of total investment fell to 37%. This funding imbalance risks slowing progress in hardware-intensive sectors responsible for 80% of global emissions.
Read at Business Matters
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