London reclaims European tech crown

London has reclaimed its position as Europe’s leading tech spot, overtaking Paris after a sharp rise in AI investment and a renewed influx of global capital into its startup scene.

New figures from Dealroom show London ranked fourth globally in its latest Global Tech Ecosystem Index, behind only Silicon Valley, New York and Boston, after startups in the capital raised £17.7bn (£13.2bn) last year.

AI investment in London almost doubled to $7bn, up from $3.9bn the year prior, thanks to names like Anthropic and OpenAI vastly expanding their UK presence.

The ranking marks a reversal from this time last year, when Paris briefly overtook the capital amid concerns Britain was losing ground in AI and fintech.

Since then, London has been a beneficiary of a wave of investment into frontier AI and deep technologies.

Anthropic recently announced plans for a major new London office near King’s Cross with capacity for 800 staff, while OpenAI is preparing a permanent UK base as competition for AI talent heats up.

Google Deepmind, Meta, Wayve, Synthesia, and Isomorphic Labs are also clustered around the capital’s growing ‘knowledge quarter’ in King’s Cross – London’s answer to Silicon Valley.

Dealroom said the city’s recovery was driven by “stronger venture capital investment, continued unicorn creation and depth across sectors”.

London is now home to 138 unicorns, including Wayve, Elevenlabs and fintech giants Revolut and Monzo.

Cambridge and Oxford punch above their weight

The report also pointed to the growing strength of smaller UK tech hubs outside of London.

Cambridge ranked third globally for innovation density, behind only the Bay Area and Boston, while Oxford also continued to perform strongly in deep tech and life sciences.

Europe now has 45 ecosystems in the global top 100 for innovation density, ahead of North America’s 40.

“London reclaiming the top spot in Europe reflects the maturity and resilience of the UK’s tech ecosystem”, said Dealeroom founder Yoram Wijngaarde.

“The city continues to attract globbal investment while producing internationally significant companies across AI, fintech and life sciences.”

London has also increasingly become the European base for major US AI labs, with investors warning the arrival of firms like Anthropic or OpenAI is starting to reshape salary expectations across startups.

Anthropic is currently advertising engineering roles in London paying up to £630,000 before stock options, while OpenAI has also expanded hiring across AI and infrastructure teams.

This influx of US frontier AI firms could ultimately strengthen the UK tech sector by training the next generation of founders and attracting global talent into Britain.

But the competition for talent also has also reignited concerns over whether the continent can retain its strongest homegrown companies as American giants pour billions into infrastructure and compute.

The report lands as policymakers across Europe push to develop sovereign AI and reduce their reliance on US and Chinese tech.

The UK government has actively courted major AI labs as part of its wider growth strategy, while regulators like the CMA have increasingly framed competition policy as a tool to help British startups scale.