Every time a new deal crosses a firm’s desk, analysts start from scratch, even when the answers to their most pressing questions are buried somewhere in the firm’s own history. 

That is the problem Rowspace was built to solve, and it’s why the San Francisco startup is emerging from stealth with US$50 million in funding and a bold pitch: AI for private equity that doesn’t just assist decision-making, but actually learns how a firm thinks.

The company launched publicly with a seed round led by Sequoia and a Series A co-led by Sequoia and Emergence Capital, with participation from Stripe, Conviction, Basis Set, Twine, and a group of finance-focused angel investors. 

Early customers–unnamed, but described as name-brand private equity and credit firms managing hundreds of billions to nearly a trillion dollars in assets–are already living on the platform, with about ten top firms on seven-figure annual contract values.

Two MIT graduates, one stubborn problem

Rowspace was founded by Michael Manapat and Yibo Ling, who met as graduate students at MIT before diverging into very different careers. Manapat went on to build the machine learning systems at Stripe that process billions of transactions, then helped drive Notion’s expansion into AI as its CTO. 

Ling took the finance route–a two-time CFO who led finance teams at Uber and Binance, and spent years making investment decisions by manually synthesising data across fragmented systems. When ChatGPT launched in late 2022, Ling tested it on due diligence tasks and ran straight into the same wall. 

“Clearly there was a lot of promise, but it just wasn’t working,” he told Fortune. “You need the right information in the right context.” That gap — between AI’s potential and the messy, proprietary, institution-specific data reality of finance—became the founding thesis.

Ling, Co-founder and COO, put it plainly: “Most tech tools aren’t comprehensive or nuanced enough for finance. And most finance tools need to raise their technical ceiling. We intend to do both.”

What AI for private equity actually looks like

Rowspace’s platform connects structured and unstructured data across a firm’s entire history–document repositories, investment and accounting systems, old PowerPoints, deal memos–and applies what Manapat calls a finance-native lens: one that reflects how a firm actually reconciles information, interprets discrepancies, and makes decisions. Crucially, it processes all of this inside a client’s own cloud environment. The firm’s data never leaves its control.

The result is accessible through Rowspace’s own interface, within tools like Excel and Microsoft Teams, or directly into a firm’s existing data infrastructure. A first-year analyst reviewing a new deal can surface decades of prior decisions, comparable transactions, and internal underwriting patterns without picking up the phone or hunting through shared drives.

“Finance is full of high-stakes decisions. There used to be a tradeoff between moving quickly and making fully informed, nuanced decisions using all the possible data at a firm’s disposal. Our AI platform eliminates that tradeoff,” said Michael Manapat, Co-founder and CEO of Rowspace. “We’re building specialised intelligence that turns a firm’s data into scalable judgment with the rigour finance demands.”

The ambition is captured in a line Manapat uses internally: “Imagine a firm that never forgets. Where an experienced investor’s workflows–touching many different tools in specific ways–can be codified and multiplied. When that’s possible, a first-year analyst can tap into decades of institutional knowledge, and judgment scales with a firm instead of being diluted.”

Why Sequoia and Emergence are betting on vertical AI

The investor conviction behind this raise is itself a signal worth reading. Alfred Lin, the Sequoia partner who led the investment, positioned Rowspace as a direct answer to the question of what AI applications will survive the rise of increasingly capable foundation models.

“Michael built the machine learning systems at Stripe that process billions of transactions and helped drive Notion’s expansion into AI. Yibo has been a finance leader and investor who’s wrestled with the exact challenges Rowspace is solving,” Lin said, adding that both Michael and Yibo have seen the problem from both sides, pairing technical depth with firsthand understanding of what customers actually need.

Jake Saper, General Partner at Emergence Capital, went further on the data infrastructure thesis: “They’re doing the previously impossible work of connecting proprietary data, and reconciling and reasoning over it with real rigour. Without this foundation, it doesn’t matter what other AI tools you’re using.”

The argument is a neat inversion of the fear gripping much of the software industry right now: that foundation models will eventually commoditise applications. Lin’s view is the opposite–that vertical AI systems built on deep, proprietary data layers are precisely where durable competitive advantage will compound. 

For AI for private equity specifically, where alpha is by definition firm-specific and non-replicable, that logic is particularly hard to argue with. The back office of investment management has quietly been one of the last frontiers general AI has struggled to crack. Rowspace just raised $50 million on the premise that it knows why–and what to do about it.

(Photo by Rowspace)

See also: Santander and Mastercard run Europe’s first AI-executed payment pilot

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events including the Cyber Security & Cloud Expo. Click here for more information.

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The AI-as-a-Service company has closed an eight-figure Series A round led by Lion X Ventures, a Singapore-based venture capital fund advised by OCBC Bank’s Mezzanine Capital Unit, with participation from ADATA, a Taiwan-listed technology company, a Korean financial institution, and a group of finance industry veterans.

The funding will accelerate deployment of what Dyna.Ai calls its agentic AI in the financial services platform–a platform already live across banks and financial institutions in Asia, the Americas, and the Middle East

Execution over experimentation

What sets Dyna.Ai apart from the broader wave of enterprise AI startups is its deliberate narrowness. Founded in 2024, the company positioned itself not as a general-purpose AI platform but as an execution-focused operator inside regulated environments–places where compliance, auditability, and governance are not optional extras but baseline requirements.

Its platform combines domain-specific expertise, AI agent builders, task-ready agents, and fully operational agentic applications capable of running within defined workflows. The pitch, framed under a “Results-as-a-Service” model, is that enterprises don’t need more experimentation–they need AI that works within the constraints of their industry and produces measurable outcomes from day one.

“While much of the industry was focused on how broadly AI could be applied, we doubled down early on a specific, pressing problem and built it with outcomes in mind,” said chairman and co-founder of Dyna.Ai Tomas Skoumal. 

Why investors are betting on this moment

The timing of this raise is significant. Across the region, the conversation around AI in enterprise has shifted–from whether to adopt it, to how to make it stick. Irene Guo, CEO of Lion X Ventures, captured the mood among investors clearly.

“Enterprise AI is entering a phase where execution and measurable outcomes matter more than experimentation. Dyna.Ai differentiates itself through strong domain expertise, operational discipline, and the ability to deploy agentic AI within complex, regulated enterprise environments,” Guo noted.

That regulatory dimension is where the real friction lies for most institutions. Agentic AI–systems capable of autonomous decision-making and task execution within defined parameters–carries a different risk profile than a standard AI model generating recommendations. 

In banking and insurance, especially, those agents need to trigger workflows, update records, and handle documentation with full accountability trails. Getting that right requires more than good models; it requires governance architecture built into the product from the ground up.

Cynthia Siantar, Dyna.Ai’s Head of Investor Relations and General Manager for Singapore and Hong Kong, pointed to a clear shift in how enterprise buyers in the region are approaching this: “The focus has moved past pilots and experimentation to how AI can be deployed in day-to-day operations and deliver real outcomes.”

A market that’s ready

The macroeconomic backdrop supports the appetite. Southeast Asia’s AI market is projected to exceed US$16 billion by 2033, and the financial services sector–long constrained by legacy infrastructure and regulatory caution–is increasingly seen as one of the highest-value targets for agentic AI in financial services deployment.

The investor syndicate around this raise is itself telling. The involvement of a Korean financial institution alongside OCBC-advised capital and a Taiwan-listed tech company signals cross-border appetite that spans both the buy-side and the infrastructure side of the equation.

For the broader industry, Dyna.Ai’s Series A is a data point in a larger pattern: the era of AI pilots has a shrinking shelf life. Enterprises that cannot move from proof-of-concept to production–within the compliance frameworks their regulators demand–will increasingly look to specialists who can.

The pilots had their moment. Now comes the hard part.

(Photo by Dyna.Ai)

See also: Santander and Mastercard run Europe’s first AI-executed payment pilot

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events including the Cyber Security & Cloud Expo. Click here for more information.

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The update was shared at the Cloud & AI Innovation Summit in Jakarta, where business and government leaders met to discuss how Indonesia can advance its AI ambitions. Speakers included Mike Chan, who leads Azure AI Apps & Agents in Asia, and Dharma Simorangkir, President Director of Microsoft Indonesia. Their message was that local capacity is only useful if organisations put it to work.

During the event, Dharma said the new services “open the door for every organisation to innovate in Indonesia, for Indonesia,” calling on teams in sectors to build solutions that tackle national needs.

A shift toward building, not just adopting

Many Indonesian enterprises are moving beyond basic AI trials and are now designing tools that solve problems unique to their operations.

Microsoft describes these kinds of organisations as Frontier Firms – teams that treat AI as a core part of how they work rather than an optional add-on. The firms tend to focus on building applications that make tasks easier for customers, improve internal processes, or modernise old workflows.

To support this shift, the Indonesia Central region now hosts a range of Azure services that help teams design and deploy software. They include tools for building data-connected applications, services for storing and managing structured data, and a set of AI-ready virtual machines that can train and run advanced models. Machines built for heavy computing work allow teams to keep data inside the country while working with complex AI workloads.

The region now supports Microsoft 365 Copilot, bringing AI features to common work tools. Developers also have access to GitHub Copilot, which suggests code and speeds up software development. These services form a connected stack that helps teams move past small pilots and into production, where reliability and cost control matter more.

Early Microsoft cloud projects emerging in Indonesia

The expansion of the region follows steady demand since its launch in May 2025. Companies in mining, travel, and digital services are already using local cloud infrastructure to refresh legacy systems and meet stricter data governance needs.

Petrosea and Vale Indonesia are among the firms using the region to support technical upgrades and secure local data storage. Digital-first players are also experimenting with more direct AI engagement. One example is tiket.com, which built its own AI travel assistant using the Azure OpenAI Service. The assistant lets customers interact with the platform in everyday language, from checking flight updates to adding extra services after a booking.

“Our advancements in artificial intelligence are designed to deliver the best possible experience for our customers,” said Irvan Bastian Arief, PhD, Vice President of Technology GRAND, Data & AI at tiket.com.

The company sees conversational AI as a way to make travel planning simpler while reducing friction in customer support.

Bringing scattered data into one system

A major theme at the summit was the need to get data in order before adopting AI at scale. To support this, Microsoft introduced Microsoft Fabric to the Indonesian market. Fabric is a single environment that brings together data engineering, integration, warehousing, analytics, and business intelligence. It includes Copilot features that help teams prepare data and build insights without juggling multiple tools.

For many organisations, data sits in different internal systems and cloud providers. Fabric gives teams one place to bring these sources together, which may help improve governance, speed up reporting, and control costs. The platform is designed for teams that want structure without building their own data foundation from scratch.

Preparing Indonesia’s workforce for practical AI with Microsoft tools

The day’s focus was not limited to infrastructure. Microsoft also highlighted its AI training program, Microsoft Elevate, which is now entering its second year. The programme has already reached more than 1.2 million learners and aims to certify 500,000 people in AI skills by 2026. The next phase will focus on hands-on use, encouraging participants to apply AI in real settings rather than only learning concepts in theory.

Training covers a wide range of groups – teachers, nonprofit workers, community leaders, and people looking to improve their digital skills. Participants learn through tools like Microsoft Copilot, Learning Accelerator, Minecraft Education, and modules designed to explain how AI can support practical tasks.

During the summit, Dharma said that cloud and AI “are the backbone of national competitiveness” and stressed that infrastructure only matters if people are prepared to use it.

Building a long-term ecosystem

Such efforts sit in a broader commitment of US$1.7 billion that Microsoft has pledged for Indonesia from 2024 to 2028. The investment spans infrastructure, partner support, and talent development. The company is also preparing to host GitHub Universe Jakarta on 3 December 2025, a developer-focused gathering meant to encourage collaboration among software teams, startups, and researchers.

Indonesia is aiming to position itself as a centre for secure and inclusive AI development in the region. With the expansion of the Indonesia Central cloud region, new data and AI tools, and growing attention on workforce training, the country is taking steps to build the foundations needed for long-term digital growth. Companies now have the option to build AI systems closer to home, developers have more resources, and workers have more pathways to gain practical skills.

The coming years will show how these pieces fit together as organisations move from experimentation to long-term use.

(Photo by Simon Ray)

See also: Microsoft, NVIDIA, and Anthropic forge AI compute alliance

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events, click here for more information.

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Starting with OpenAI’s reorganisation, the aim is to solidify the nonprofit’s control over the for-profit business and establish the newly named OpenAI Foundation as a global philanthropic powerhouse, holding equity in the commercial arm valued at approximately $130 billion.

This reorganisation, which OpenAI says “maintains the strongest representation of mission-focused governance in the industry today,” effectively turns the company’s commercial success into a direct funding pipeline for its original mission.

The for-profit entity is now a public benefit corporation called OpenAI Group PBC, legally bound to that mission. As this PBC grows, so does the Foundation’s $130 billion stake, which will be used to fund an initial $25 billion commitment to global health and AI resilience.

This restructure was finalised after nearly a year of “constructive dialogue” with the offices of the Attorneys General of California and Delaware. OpenAI acknowledged it “made several changes as a result of those discussions” and stated its belief that the company, and by extension the public it serves, “are better for them.”

The other side of this new structure is the redefined partnership with Microsoft. The tech giant’s investment is now valued at $135 billion, giving it a 27 percent stake in the OpenAI Group PBC. This represents a slight dilution from its previous 32.5 percent stake, reflecting new funding rounds. The agreement preserves Microsoft’s core position as the exclusive Azure API provider for OpenAI’s frontier models, but only until artificial general intelligence (AGI) is achieved.

The new terms introduce a new check on that path. Any declaration of AGI by OpenAI must now be verified by an independent expert panel. This external check is a major update to the governance of the partnership. Microsoft’s intellectual property rights are also extended through 2032 and now include models developed after AGI is declared, with appropriate safety guardrails.

Microsoft can also now independently pursue AGI, either on its own or with other partners. This gives Microsoft a new path forward, separate from its reliance on OpenAI’s research. If Microsoft uses OpenAI’s IP to develop AGI before it is officially declared, those models will be subject to compute thresholds significantly larger than systems in use today.

But the new freedoms cut both ways. OpenAI has also secured new flexibility. It has committed to purchasing an incremental $250 billion of Azure services, but Microsoft no longer holds a right of first refusal as its compute provider. This gives OpenAI new leverage in its infrastructure negotiations.

The company can also now release open weight models that meet certain criteria and serve US government national security customers on any cloud, a notable new ability. It also gains the power to jointly develop some non-API products with third parties, although API products developed with others must remain on Azure. Microsoft’s IP rights also specifically exclude any of OpenAI’s future consumer hardware.

The existing revenue share agreement remains in place until the expert panel verifies AGI, though payments will be stretched over a longer period. Both companies framed the new chapter as a way to continue innovating. OpenAI concluded that this new structure provides both the ability to push the AI frontier and an updated model to “ensure that progress serves everyone.”

See also: OpenAI connects ChatGPT to enterprise data to surface knowledge

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events including the Cyber Security Expo, click here for more information.

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Founded and headquartered in San Francisco since 1999, Salesforce has been adding AI features across its products, including the workplace messaging tool Slack. The company is competing with ServiceNow, Oracle, and Microsoft to attract organisations eager to integrate AI into their operations.

Part of the new investment will fund an AI incubator on Salesforce’s San Francisco campus and help companies deploy AI agents — digital assistants that can handle tasks for users.

“This $15 billion investment reflects our deep commitment to our hometown — advancing AI innovation, creating jobs and helping companies and our communities thrive,” said CEO Marc Benioff.

The announcement comes just before Dreamforce, Salesforce’s annual conference, which runs from October 14 to 16 in San Francisco. The company expects around 50,000 people to attend and estimates the event will bring in about $130 million in local revenue.

Salesforce, which employs more than 76,000 people worldwide, also announced last week that it will spend $1 billion in Mexico over the next five years. The company has operated there since 2006.

Morningstar analyst Dan Romanoff said the new spending aligns with the company’s long-term goals. “If the company wants to remain a leader in an important emerging technology area, it must have a pipeline of talent to innovate and drive the field forward. We already see shortages of AI talent, so this makes sense,” he said.

Salesforce shares rose 2.8% on Monday but remain down about 28% since the start of the year.

On the same day, Salesforce also launched Agentforce 360, a new AI platform for businesses.

While many companies are still experimenting with AI-driven automation, Salesforce says it has already rolled out multiple versions of its “agentic” technology, used by thousands of customers and within its own operations.

The company describes the “Agentic Enterprise” as a workplace model where AI supports people rather than replaces them. In this setup, AI agents help teams respond faster, track leads, provide continuous service, and make better decisions. The goal, Salesforce says, is to boost productivity and customer engagement.

Agentforce 360 combines four key parts of this model:

• Agentforce 360 Platform: A framework for building enterprise AI agents, now featuring a conversational builder, hybrid reasoning for more accurate results, and voice support.
• Data 360: A unified data layer that gives AI systems the context they need. Features like Intelligent Context and Tableau Semantics help turn raw data into meaningful insights.
• Customer 360 Apps: The tools that record how a company sells, serves, and operates — now enhanced with AI to better understand customer behaviour and internal processes.
• Slack: A shared space where people and AI agents can work together, linking information and actions in real time.

Salesforce says this setup allows businesses to build AI agents that rely on trusted data, function across departments, and integrate directly with existing workflows. Its open ecosystem also lets partners tailor the technology for different industries.

Last month, Salesforce forecast third-quarter revenue that fell short of analyst expectations but expanded its share buyback plan by $20 billion.

(Photo by Denys Nevozhai)

See also: Salesforce Agentforce 3 brings visibility to AI agents

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events, click here for more information.

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The UK’s AI sector is clearly in the throes of a boom, with revenues shattering previous records to hit £23.9 billion in the last year. The engine room of this growth is a thriving and rapidly expanding community of over 5,800 AI companies—a 58 percent increase since 2023 alone.

This isn’t just about big tech, either. The surge is being driven from the ground up by exciting startups. Small and medium-sized businesses make up over 90 percent of the new entrants, fuelling a wave of innovation across the country. This translates to real jobs, with employment in the sector jumping by a third to more than 86,000 people.

Feryal Clark MP, Parliamentary Under-Secretary of State for AI and Digital Government, said: “This means that since 2022, the UK AI sector has grown 150 times faster than the economy at large. This growth reflects the increasing integration of AI across the economy, from healthcare and finance to manufacturing and professional services.”

So, what’s fuelling this impressive expansion? A torrent of investment.

Investor confidence has not just returned; it has reignited, with a record £2.9 billion investment pouring into dedicated AI firms in 2024. The UK has also become a top destination for international capital, attracting £15 billion in inward investment projects this year, which are expected to create over 6,500 jobs.

While London and the South East remain the UK’s AI heartland, the boom is rippling out across the nation. Regions like the West Midlands, the North West, and Yorkshire and the Humber have seen the number of local AI firms at least double since 2022.

However, beneath the surface of these bullish headlines, the UK AI sector is suffering from growing pains. 

According to Isabella Grandi, Director for Data Strategy and Governance at NTT DATA, “The sector is clearly booming, but the study also reveals the pressure points. Companies are struggling to find enough skilled people, and late-stage capital remains thin whilst the lines remain blurred.”

While the UK is a world-class incubator for new ideas, the report notes a frustrating lack of the later-stage growth funding needed to turn promising AI startups into global giants. As one investor put it, the UK is “very good at the start phase, but [that at] the scale up phase (beyond Series A), there’s a missing piece there”. 

Beyond funding, businesses are calling for a clearer rulebook on how to operate. Grandi warns that long-term success of the UK AI sector depends on building trust, a task made harder by regulatory uncertainty.

“Successful AI adoption hinges on how much we can trust it,” Grandi says. “The government’s AI sector study shows rapid expansion alongside a security-first drift, but safety and ethics need to be kept firmly in view, or adoption will slow.”

She points to the EU’s more structured approach as a model for the clarity that companies are craving. 

“Firms need a rule book that they can apply. Legislation such as the EU AI Act is backed by practical guidance, and countries such as Ireland are already outlining compliance steps,” Grandi explains. “It’s this level of certainty that gives companies a clear path forward, and the UK must provide the same clarity.”

Despite these challenges, the mood on the ground around AI investment remains positive. 58 percent of AI firms expect their revenues to grow by 50 percent or more in the coming year. The growth potential for the UK AI sector is undeniable, but as Grandi concludes, seizing it will require confronting these issues head-on to achieve “responsible, inclusive, and commercially viable AI innovation.”

As for the UK Government itself, a three-month trial by the Department for Business & Trade of Microsoft Copilot yielded less exciting results. It’s perhaps a good thing, then, that US federal government workers are getting free access to Copilot.

See also: Switzerland releases 100% open AI model

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events, click here for more information.

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During an event in Cannes on Monday, Robinhood co-founder and CEO Vlad Tenev displayed what he described as “stock tokens” for OpenAI and SpaceX. The move forms part of Robinhood’s European expansion, which also includes offering more than 200 tokenised shares of publicly-traded US stocks to EU users.

Tenev told attendees that European users who download the Robinhood app would have the opportunity to own tokenised shares in OpenAI and Elon Musk’s space exploration venture SpaceX, both of which are private companies that haven’t announced plans to go public.

The trading platform explains on its website: “Robinhood Stock Tokens follow the prices of publicly-traded stocks and ETFs — they are derivatives tracked on the blockchain, giving you exposure to the US market. When buying stock tokens, you are not buying the actual stocks — you are buying tokenised contracts that follow their price, recorded on a blockchain.”

This distinction means token holders wouldn’t enjoy traditional shareholder rights, such as voting privileges, despite having financial exposure to the companies.

OpenAI rebuffs Robinhood’s tokenised shares offering

The announcement triggered a sharp rebuke from OpenAI. The high-profile AI firm, led by Sam Altman, categorically denied any involvement with Robinhood’s initiative.

“These ‘OpenAI tokens’ are not OpenAI equity,” the company stated in a post on X. “We did not partner with Robinhood, were not involved in this, and do not endorse it. Any transfer of OpenAI equity requires our approval — we did not approve any transfer. Please be careful.”

Industry observers note that Robinhood’s approach appears designed to provide price exposure to underlying equities rather than actual ownership, likely structured this way to navigate complex regulatory requirements.

This mechanism bears similarities to offerings from other financial technology firms. For instance, cryptocurrency platform Kraken offers products called xStocks that likewise don’t represent direct equity ownership but are instead backed by underlying shares.

The introduction of tokenised shares like OpenAI represents Robinhood’s latest effort to expand its footprint in Europe while broadening its cryptocurrency and blockchain-based offerings. During the same announcement, the company promoted the launch of tokenised US equities in Europe, alongside perpetual trading and staking capabilities for American users.

Implications for private market investment

Robinhood’s initiative, if successful despite the pushback, could democratise access to sought-after private companies whose shares are typically available only to institutional investors, venture capitalists, and accredited individual investors.

However, the controversy highlights the challenges of bringing innovation to regulated financial markets, particularly when dealing with private companies that maintain tight control over their equity.

Financial experts caution that potential investors should thoroughly understand the distinction between these tokenised derivatives and actual equity ownership. The value proposition and risks differ significantly from traditional share ownership, even as they provide exposure to previously inaccessible investment opportunities.

Robinhood’s broader European expansion continues apace, with the company keen to capitalise on growing interest in both American equities and cryptocurrency investments among European traders. Whether the issue of tokenised shares, and the subsequent backlash from companies like OpenAI, will help or hinder those ambitions remains to be seen.

See also: Flood of interest in Europe’s AI Gigafactories plan

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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Senior figures from Boston Consulting Group (BCG) and its tech division, BCG X, discussed the intricate dynamics of the global AI race, the dominance of superpowers like the US and China, the role of emerging “middle powers,” and the implications for multinational corporations.

AI investments expose businesses to increasingly tense geopolitics

Sylvain Duranton, Global Leader at BCG X, noted the significant geopolitical risk companies face: “For large companies, close to half of them, 44%, have teams around the world, not just in one country where their headquarters are.”

Many of these businesses operate across numerous countries, making them vulnerable to differing regulations and sovereignty issues. “They’ve built their AI teams and ecosystem far before there was such tension around the world.”

Duranton also pointed to the stark imbalance in the AI supply race, particularly in investment.

Comparing the market capitalisation of tech companies, the US dwarfs Europe by a factor of 20 and the Asia Pacific region by five. Investment figures paint a similar picture, showing a “completely disproportionate” imbalance compared to the relative sizes of the economies.

This AI race is fuelled by massive investments in compute power, frontier models, and the emergence of lighter, open-weight models changing the competitive dynamic.   

Benchmarking national AI capabilities

Nikolaus Lang, Global Leader at the BCG Henderson Institute – BCG’s think tank – detailed the extensive research undertaken to benchmark national GenAI capabilities objectively.

The team analysed the “upstream of GenAI,” focusing on large language model (LLM) development and its six key enablers: capital, computing power, intellectual property, talent, data, and energy.

Using hard data like AI researcher numbers, patents, data centre capacity, and VC investment, they created a comparative analysis. Unsurprisingly, the analysis revealed the US and China as the clear AI frontrunners and maintain leads in geopolitics.

The US boasts the largest pool of AI specialists (around half a million), immense capital power ($303bn in VC funding, $212bn in tech R&D), and leading compute power (45 GW).

Lang highlighted America’s historical dominance, noting, “the US has been the largest producer of notable AI models with 67%” since 1950, a lead reflected in today’s LLM landscape. This strength is reinforced by “outsized capital power” and strategic restrictions on advanced AI chip access through frameworks like the US AI Diffusion Framework.   

China, the second AI superpower, shows particular strength in data—ranking highly in e-governance and mobile broadband subscriptions, alongside significant data centre capacity (20 GW) and capital power. 

Despite restricted access to the latest chips, Chinese LLMs are rapidly closing the gap with US models. Lang mentioned the emergence of models like DeepSpeech as evidence of this trend, achieved with smaller teams, fewer GPU hours, and previous-generation chips.

China’s progress is also fuelled by heavy investment in AI academic institutions (hosting 45 of the world’s top 100), a leading position in AI patent applications, and significant government-backed VC funding. Lang predicts “governments will play an important role in funding AI work going forward.”

The middle powers: Europe, Middle East, and Asia

Beyond the superpowers, several “middle powers” are carving out niches.

• EU: While trailing the US and China, the EU holds the third spot with significant data centre capacity (8 GW) and the world’s second-largest AI talent pool (275,000 specialists) when capabilities are combined. Europe also leads in top AI publications. Lang stressed the need for bundled capacities, suggesting AI, defence, and renewables are key areas for future EU momentum.
• Middle East (UAE & Saudi Arabia): These nations leverage strong capital power via sovereign wealth funds and competitively low electricity prices to attract talent and build compute power, aiming to become AI drivers “from scratch”. They show positive dynamics in attracting AI specialists and are climbing the ranks in AI publications.   
• Asia (Japan & South Korea): Leveraging strong existing tech ecosystems in hardware and gaming, these countries invest heavily in R&D (around $207bn combined by top tech firms). Government support, particularly in Japan, fosters both supply and demand. Local LLMs and strategic investments by companies like Samsung and SoftBank demonstrate significant activity.   
• Singapore: Singapore is boosting its AI ecosystem by focusing on talent upskilling programmes, supporting Southeast Asia’s first LLM, ensuring data centre capacity, and fostering adoption through initiatives like establishing AI centres of excellence.   

The geopolitics of generative AI: Strategy and sovereignty

The geopolitics of generative AI is being shaped by four clear dynamics: the US retains its lead, driven by an unrivalled tech ecosystem; China is rapidly closing the gap; middle powers face a strategic choice between building supply or accelerating adoption; and government funding is set to play a pivotal role, particularly as R&D costs climb and commoditisation sets in.

As geopolitical tensions mount, businesses are likely to diversify their GenAI supply chains to spread risk. The race ahead will be defined by how nations and companies navigate the intersection of innovation, policy, and resilience.

(Photo by Markus Krisetya)

See also: OpenAI counter-sues Elon Musk for attempts to ‘take down’ AI rival

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As the UK government prioritises AI within its “Plan for Change,” Kyle’s visit aims to strengthen the special relationship between the UK and the US that has been under particular strain in recent years.

Speaking at NVIDIA’s annual conference in San Jose on 20th March, Kyle outlined the government’s strategy to “rewire” the British economy around AI. This initiative seeks to distribute the benefits of AI-driven wealth creation beyond traditional hubs like Silicon Valley and London, empowering communities across the UK to embrace its opportunities.

Addressing an audience of business leaders, developers, and innovators, the Technology Secretary articulated his vision for leveraging AI and advanced technologies to tackle complex global challenges, positioning Britain as a beacon of innovation.

The UK is actively deploying AI to enhance public services and stimulate economic growth, a cornerstone of the government’s “Plan for Change.”

Kyle is now highlighting the significant potential of the UK’s AI sector, currently valued at over $92 billion and projected to exceed $1 trillion by 2035. This growth trajectory, according to the government, will position Britain as the second-leading AI nation in the democratic world—presenting a wealth of investment opportunities for US companies and financial institutions.

A central theme of Kyle’s message is the readiness of the UK to embrace AI investment, with a particular emphasis on transforming “the relics of economic eras past into the UK’s innovative AI Growth Zones.”

These “AI Growth Zones” are a key element of the government’s AI Opportunities Action Plan. They are strategically designated areas designed to rapidly attract large-scale AI investment through streamlined regulations and dedicated infrastructure.

AI Growth Zones, as the name suggests, are envisioned as vibrant hubs for AI development with a pipeline of new opportunities for companies to scale up and innovate. The Technology Secretary is actively encouraging investors to participate in this new form of partnership.

During his speech at the NVIDIA conference, Kyle is expected to detail how these Growth Zones – benefiting from access to substantial power connections and a planning system designed to expedite construction – will facilitate the development of a compute infrastructure on a scale that the UK “has never seen before.”

The government has already received numerous proposals from local leaders and industry stakeholders across the nation, demonstrating Britain’s eagerness to utilise AI to revitalise communities and drive economic growth throughout the country.

This initiative is expected to contribute to higher living standards across the UK, a key priority for the government over the next four years. The AI Growth Zones are intended to deliver the jobs, investment, and a thriving business environment necessary to improve the financial well-being of citizens and deliver on the “Plan for Change.”

At the NVIDIA conference, Kyle is expected to say: “In empty factories and abandoned mines, in derelict sites and unused power supplies, I see the places where we can begin to build a new economic model. A model completely rewired around the immense power of artificial intelligence.

“Where, faced with that power, the state is neither a blocker nor a shirker—but an agile, proactive partner. In Britain, we want to turn the relics of economic eras past into AI Growth Zones.”

As part of his visit to the US, Peter Kyle will also engage with prominent companies in the tech sector, including OpenAI, Anthropic, NVIDIA, and Vantage. His aim is to encourage more of these companies to establish a presence in the UK, positioning it as their “Silicon Valley home from home.”

Furthermore, the Technology Secretary is expected to state: “There is a real hunger for investment in Britain, and people who are optimistic about the future, and hopeful for the opportunities which AI will bring for them and their families. States owe it to their citizens to support it. Not through diktat or directive, but through partnership.”

The UK Prime Minister and the President of the US have placed AI at the forefront of the transatlantic relationship. During a visit to the White House last month, the Prime Minister confirmed that both nations are collaborating on a new economic deal with advanced technologies at its core.

Since unveiling its new AI strategy at the beginning of the year and assigning the technology a central role in delivering the government’s ‘Plan for Change,’ the UK has already witnessed significant investment from US companies seeking to establish AI bases in Britain.

Notable recent investments include a substantial £12 billion commitment from Vantage Data Centers to significantly expand Britain’s data infrastructure, which is projected to create approximately 11,500 jobs. Additionally, last month saw the UK Government formalise a partnership with Anthropic to enhance collaboration on leveraging AI to improve public services nationwide.

By strengthening these partnerships with leading US tech firms and investors, the UK’s AI sector is well-positioned for sustained growth as the government aims to continue to remove innovation barriers.

(Photo by Billy Joachim)

See also: OpenAI and Google call for US government action to secure AI lead

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In this article, we delve deeper into the key findings and implications—drawing on additional sources to enhance our understanding.

Thriving industry with significant growth

The study highlights the remarkable growth of the UK’s AI sector. With over 3,170 active AI companies, these firms have generated £10.6 billion in AI-related revenues and employed more than 50,000 people in AI-related roles. This significant contribution to GVA (Gross Value Added) underscores the sector’s transformative potential in driving the UK’s economic growth.

Mark Boost, CEO of Civo, said: “In a space that’s been dominated by US companies for too long, it’s promising to see the government now stepping up to help support the UK AI sector on the global stage.”

The study shows that AI activity is dispersed across various regions of the UK, with notable concentrations in London, the South East, and Scotland. This regional dispersion indicates a broad scope for the development of AI technology applications across different sectors and regions.

Investment and funding

Investment in the AI sector has been a key driver of growth. In 2022, £18.8 billion was secured in private investment since 2016, with investments made in 52 unique industry sectors compared to 35 sectors in 2016.

The government’s commitment to supporting AI is evident through significant investments. In 2022, the UK government unveiled a National AI Strategy and Action Plan—committing over £1.3 billion in support for the sector, complementing the £2.8 billion already invested.

However, as Boost cautions, “Major players like AWS are locking AI startups into their ecosystems with offerings like $500k cloud credits, ensuring that emerging companies start their journey reliant on their infrastructure. This not only hinders competition and promotes vendor lock-in but also risks stifling innovation across the broader UK AI ecosystem.”

Addressing bottlenecks

Despite the growth and investment, several bottlenecks must be addressed to fully harness the potential of AI:

• Infrastructure: The UK’s digital technology infrastructure is less advanced than many other countries. This bottleneck includes inadequate data centre infrastructure and a dependent supply of powerful GPU computer chips. Boost emphasises this concern, stating “It would be dangerous for the government to ignore the immense compute power that AI relies on. We need to consider where this power is coming from and the impact it’s having on both the already over-concentrated cloud market and the environment.”

• Commercial awareness: Many SMEs lack familiarity with digital technology. Almost a third (31%) of SMEs have yet to adopt the cloud, and nearly half (47%) do not currently use AI tools or applications.

• Skills shortage: Two-fifths of businesses struggle to find staff with good digital skills, including traditional digital roles like data analytics or IT. There is a rising need for workers with new AI-specific skills, such as prompt engineering, that will require retraining and upskilling opportunities.

To address these bottlenecks, the government has implemented several initiatives:

• Private sector investment: Microsoft has announced a £2.5 billion investment in AI skills, security, and data centre infrastructure, aiming to procure more than 20,000 of the most advanced GPUs by 2026.

• Government support: The government has invested £1.5 billion in computing capacity and committed to building three new supercomputers by 2025. This support aims to enhance the UK’s infrastructure to stay competitive in the AI market.

• Public sector integration: The UK Government Digital Service (GDS) is working to improve efficiency using predictive algorithms for future pension scheme behaviour. HMRC uses AI to help identify call centre priorities, demonstrating how AI solutions can address complex public sector challenges.

Future prospects and challenges

The future of the UK AI sector is both promising and challenging. While significant economic gains are predicted, including boosting GDP by £550 billion by 2035, delays in AI roll-out could cost the UK £150 billion over the same period. Ensuring a balanced approach between innovation and regulation will be crucial.

Boost emphasises the importance of data sovereignty and privacy: “Businesses have grown increasingly wary of how their data is collected, stored, and used by the likes of ChatGPT. The government has a real opportunity to enable the UK AI sector to offer viable alternatives.

“The forthcoming AI Action Plan will be another opportunity to identify how AI can drive economic growth and better support the UK tech sector.”

• AI Safety Summit: The AI Safety Summit at Bletchley Park highlighted the need for responsible AI development. The “Bletchley Declaration on AI Safety” emphasises the importance of ensuring AI tools are transparent, fair, and free from bias to maintain public trust and realise AI’s benefits in public services.

• Cybersecurity challenges: As AI systems handle sensitive or personal information, ensuring their security is paramount. This involves protecting against cyber threats, securing algorithms from manipulation, safeguarding data centres and hardware, and ensuring supply chain security.

The AI sector study underscores a thriving industry with significant growth potential. However, it also highlights several bottlenecks that must be addressed – infrastructure gaps, lack of commercial awareness, and skills shortages – to fully harness the sector’s potential.

(Photo by John Noonan)

See also: EU AI Act: Early prep could give businesses competitive edge

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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The announcement, made during the International Investment Summit, was welcomed by Technology Secretary Peter Kyle as a “vote of confidence” in Britain’s approach to partnering with businesses to drive growth.

CyrusOne, ServiceNow, CloudHQ, and CoreWeave have all committed to substantial investments, bringing the total investment in UK data centres to over £25 billion since the current government took office. These new facilities will provide the UK with increased computing power and data storage capabilities, essential for training and deploying next-generation AI technologies.

“Tech leaders from all over the world are seeing Britain as the best place to invest with a thriving and stable market for data centres and AI development,” stated Kyle.

The largest single investment comes from Washington DC-based CloudHQ, which plans to develop a £1.9 billion data centre campus in Didcot, Oxfordshire. This hyper-scale facility is expected to create 1,500 jobs during construction and 100 permanent positions once operational.

ServiceNow has pledged £1.15 billion over the next five years to expand its UK operations. This investment will support AI development, expand data centres with Nvidia GPUs for local processing of LLM data, and grow the company’s UK workforce beyond its current 1,000 employees. ServiceNow also plans to offer new skills programmes to reach 240,000 UK learners.

ServiceNow’s AI platform is already utilised by 85% of Fortune 500 companies and more than half of the FTSE100. In the UK, the company works with organisations including BT Group, Aston Martin Aramco Formula One Team, and hundreds of public sector bodies such as the NHS and the Department for Work and Pensions.

Rachel Reeves, Chancellor of the Exchequer, commented: “This investment is a huge vote of confidence in the UK’s tech and AI sector, and is exactly the kind we want to see as we grow the economy. That’s what the International Investment Summit is all about too. Showing global investors and business that Britain is open for business.”

CyrusOne, a leading global data centre developer, announced plans to invest £2.5 billion in the UK over the coming years. Subject to planning permission, their projects are expected to be operational by Q4 2028 and create over 1,000 jobs.

AI hyperscaler CoreWeave confirmed an additional £750 million investment to support the next generation of AI cloud infrastructure, building on its £1 billion investment announced in May.

These investments follow recent commitments from other tech giants, including Blackstone’s £10 billion investment in the North East of England and Amazon Web Services’ plan to invest £8 billion in UK data centres over the next five years.

The UK government has been actively supporting the growth of data infrastructure and the broader tech sector. Last month, data centres were classified as ‘Critical National Infrastructure’ (CNI), providing the industry with greater government support. Additionally, the Tech Secretary appointed entrepreneur Matt Clifford to develop an AI Opportunities Action Plan, aimed at boosting AI adoption across the economy.

As part of the ongoing International Investment Summit, Prime Minister Keir Starmer is bringing together 300 industry leaders to catalyse investment in the UK. The summit will see discussions on how the UK can capitalise on emerging growth sectors including health tech, AI, clean energy, and creative industries.

Bill McDermott, Chairman and CEO of ServiceNow, said: “The UK is embracing technology transformation at scale. In this new age of AI, the country continues to be a global leader in driving innovation for the benefit of all its communities.

“Our investment accelerates the UK’s push to put AI to work, empowering people, enriching experiences, and strengthening societal bonds. Together, ServiceNow and our customers across the UK are delivering a future where technology benefits everyone.”

The series of investments and government initiatives bolstering UK data infrastructure aims to secure the country’s leadership in AI and technology innovation within Europe, and reinforces it as an attractive destination for international tech companies seeking to expand their operations.

(Photo by Freddie Collins)

See also: King’s Business School: How AI is transforming problem-solving

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The UK is Europe’s AI leader. Indeed, behind the US and China, the country’s tech sector overall has the third-highest amount of VC investment in the world – more than Germany and France combined – and has produced more than double the number of $1 billion tech firms than any other European country.

Gerard Grech, CEO of Tech Nation, said:

“As a nation uniquely positioned between two economic powerhouses, the US and the EU, we must harness innovative regulation that will enable us to propel ourselves as an international hub and leader for AI, quantum computing, and deep tech.

This is a critical step towards creating a distinctive, value-driven tech ecosystem in the UK, setting us apart from other tech hubs.”

To support British startups, an ‘AI Sandbox’ was announced by the chancellor. The sandbox features a number of initiatives designed to encourage AI research and investment.

Among them is a prize pot containing millions of pounds. £1 million will be up for grabs every year over the next decade for the best AI innovations created by teams and individuals.

Ludovico Lugnani, Technology Solicitor at BDB Pitmans, comments:

“Following yesterday’s news of Open AI’s launch of its upgraded GPT-4 chatbot, the Budget’s announcement as to the creation of an AI sandbox offers a promising outlook for the UK to speed up the arrival of AI products to market.

As part of this, particular emphasis should be placed on providing effective guidance as to the implications of copyright law on generative AI applications following the recent claim by Getty Images against Stability AI over breach of copyright.”

Elsewhere, £2.5 billion is being ploughed into advancing quantum computing. The powerful machines will enable a literal “quantum leap” in AI.

“The power that AI’s complex algorithms need can be provided by quantum computing,” the chancellor told the Commons.

£900 million is also being invested to create an exascale supercomputer that will be several times more powerful than the country’s biggest computers and advance not just AI research, but also science, healthcare, defense, weather modelling, and more.

“[The supercomputer] should be a huge boost to the UK’s ability to support cutting-edge research in areas requiring complex modelling and simulations, such as climate change, pharmaceutical development and hi-tech engineering,” commented Nick White, Partner at law firm Charles Russell Speechlys.

Only one exacomputer is currently known to exist. The computer, known as Frontier, is housed at the Oak Ridge National Laboratory in Tennessee, United States.

Other relevant announcements in the Spring Budget are targeted less at the AI industry specifically but aim to solidify the UK’s ranking as the second-best country after the US to invest and launch a business.

Under the ‘Full Expensing’ plans, companies investing in R&D and IT equipment to boost growth will benefit. Every pound a company spends on new IT equipment and machinery can be deducted in full from taxable profits.

The independent OBR (Office for Budget Responsibility) says the measure will increase business investment by three percent every year. The chancellor has committed to the measure for the next three years but intends to make it permanent “as soon as we can responsibly do so”.

Furthermore, smaller businesses will also have an increased annual investment allowance of up to £1 million. This means that 99 percent of SMEs will be able to deduct the full value of all their investments from taxable profits.

Matt Hammond, Founder of Talk Think Do, said:

“I wholly welcome the tax savings on IT investments, research and development as announced in today’s budget. In recent years, Talk Think Do has benefitted substantially from the R&D relief and as a result, we have been able to reinvest the extra cash directly into hiring sector-leading talent.  

R&D relief has helped to accelerate our expansion by over 750 percent in just four years. We are a successful example of how the relief has encouraged greater innovation in UK businesses and has unlocked significant growth opportunities. Today’s update benefits the economy at large and so I am glad to see this has been considered in the budget.”

The creation of 12 investment zones is set to further boost the UK’s tech credentials and spread opportunity across the country.

Eight have been announced in England and will be around research institutions in the East Midlands, Greater Manchester, Liverpool, North East, South Yorkshire, Tees Valley, West Midlands, and West Yorkshire.

Four more will be in Scotland, Wales, and Northern Ireland. These investment zones, based in the UK’s devolved administrations, will be announced by the end of the year.

Rikke Wichmann Bruun, CEO of MRM UK, commented:

“The announcement of investment into technology – including green technology – through the 12 investment zones presents a great opportunity for businesses and brands in the UK.

The ambition to transform Britain into the ‘next Silicon Valley’ also echoes new research conducted by our agency which found that Brits are the most optimistic about technology’s potential, in comparison to other Europeans.”

Cambridge, Oxford, and London – the so-called ‘golden triangle’ – are often seen as Europe’s closest rivals to Silicon Valley. Each city benefits from world-leading universities and research institutions that help to produce innovative startups and address global talent shortages.

The three cities are based in southern England and have historically benefited more from investment compared to the rest of the UK. Other cities – including Edinburgh and Manchester – have attracted increased investment in recent years, but it’s hoped the new zones will close the gap and unlock the potential across every region of the UK.

“Predictions that inflation will fall to 2.9 percent by the end of 2023 will be very welcome and there were a range of measures announced to boost the economy, including 12 new regional investment zones and a new policy to replace the ‘Super Deduction’,” said Stuart Haynes, Corporate and Commercial Partner at law firm Aaron & Partners.

“There are some fantastic tech innovators in this country and it’s pleasing to see the chancellor really get behind this sector to be a catalyst for economic growth.”

(Image Credit: Zara Farrar / HM Treasury under CC BY-NC-ND 2.0 license)

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