London is the best place to build an AI startup in 2023

As an AI startup founder in London, one of the most common questions I hear is “when are you moving to San Francisco?”. California is clearly a great place to start a startup, but in 2023 I think London is even better. 

Building a successful startup requires many components: talented employees, access to capital and experienced investors, a startup ecosystem, and a market of potential customers. London scores exceptionally on these dimensions.

London’s Pool of Talent

Talented employees make or break a startup, and London has a tremendous pool of talent. I’ve been hiring for the past few months for my startup, Context, and I’ve been blown away at the quality of talent we’re getting as inbound applicants. Candidates come with years of experience at top London scaleups, the big tech companies that are all based here, and their own startup adventures too.

My startup Context is in the machine learning space, so I’m particularly interested in ML engineers, and London has large numbers of these candidates from leading employers like Google Deepmind and now OpenAI’s new London office - which was a nice vote of confidence in the city. There is additionally a great pipeline of technical grads from world-leading universities like Oxford, Cambridge, Imperial, and of course UCL (not that I’m biased!)

Candidates in San Francisco are spoiled with thousands of exciting startups to join, and from what I hear this makes hiring in San Francisco very competitive. London has a great startup ecosystem, but unquestionably fewer deep pocketed companies that you have to compete against for talent. 

Unlike the US, the UK has a sane visa system for skilled workers. High potential individuals can apply for a Global Talent visa that allows employment at any company, or even starting your own company. This makes life easy for employees and founders, and is a breath of fresh air after my own experiences navigating the extremely frustrating US immigration system.

I’ve additionally been surprised how many candidates are enthusiastic to work in the office after many years of isolated working from home over the pandemic.

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Investors

Building a business is challenging without investors, but good investors are worth much more than their capital. We’re fortunate to have some fantastic VCs and angels at Context, and they’ve helped us shape the business and bring valuable advice from decades of building and investing in similar companies. 

London has a huge number of top tier VC funds. This includes great European-first firms like Index, Accel, and Balderton, and now additionally many top tier American funds like Sequoia, Andreessen Horowitz, Google Ventures, and Lightspeed. And the great US funds that don’t (yet!) have offices in Europe are open to meeting startups and making investments here. But VC funds alone don’t make a funding round, and London has a great community of experienced founder and operator angels too. 

Being based in London also allows your runway to be significantly longer, as costs are meaningfully lower than in the US.

Tech Ecosystem

Community is crucial for support and mentorship, and London has a thriving startup ecosystem. There are always exciting meetups and hackathons, and especially founder WhatsApp groups that help you  meet other founders, potential customers, and candidates. 

Yes, there are more events in San Francisco, but you can only go to so many before they become a distraction from the most important startup activities - building and talking to customers. 

Quality of Life

Living in London is great, especially in summer, and it feels that most things in the UK work relatively well. This is a refreshing change after returning from a trip to San Francisco, which I think most people would agree has many challenges that seem to get worse rather than better.

The Drawbacks

Of course, not everything about being in London is positive. The winters are dreary (to say the least) and San Francisco has more events, more B2B customers, and more top tier VC funds. But with regular travel to the Bay Area and a US network you can mitigate these drawbacks while enjoying a significantly more livable city and with a much lower burn rate. 

If you’re a London based founder building with LLMs, or a software engineer interested in joining a startup, I’d love to hear from you!