THE chief executives of some of the UK’s most promising artificial intelligence (AI) start-ups have written to Dominic Cummings asking him to provide more funding to keep struggling technology businesses afloat.
Boris Johnson’s senior adviser was warned that AI and scientific “deeptech” start-ups are facing a “liquidity crisis” which could force them to enter “six months of hibernation”, potentially causing the country to lose its standing in the global race to develop AI systems as other countries catch up.
“We know you believe that we cannot afford to lose that race – we are asking for your help now to make sure we don’t,” the letter read.
The start-ups claimed the Government’s current business loans scheme is inaccessible to loss-making technology start-ups. Executives said the UK risks falling behind France’s €4bn (£3.5bn) funding package for start-ups and a similar €2bn scheme in Germany.
Executives called on Mr Cummings to allocate additional funding to the British Business Bank which could pass on the investment to technology start-ups. The letter was signed by executives from businesses including language processing start-up Evolution AI, mental health tracker Limbic and robot chef firm Karakuri.
Without increased Government funding, the businesses said they will be left “hoping that our top talent isn’t poached by foreign competitors”.
The UK was ranked third in the world for the development and implementation of AI in December. A report published by Tortoise and compiled with AI experts found that the UK was only behind the United States and China in supporting AI development.
The plea to Mr Cummings comes after the start-up rescue package they advocated for was altered to remove suggestions the fund could make organisers a profit after backlash from investors.
Draft plans for the £300m Government-backed fund drawn up by a group of investors including Brent Hoberman, the founder of Lastminute.com, and other tech industry bodies, included the provision for 10pc “carried interest” from the portfolio, effectively profit sharing.
These initial proposals were met with scepticism from some investors, according to industry sources. One source said there had been “push back” and that it was wrong to appear to “profit from a crisis”. New proposals sent to Government have removed such a fee and state the fund will be a “not-for-profit” venture. The plan is to back 600 promising tech start-ups with up to £500,000 each in the form of interest free notes.
Documents seen by The Telegraph warn as many as 6,000 tech jobs could be lost with no action taken and warned 1,300 start-ups could be “wiped out”. The plans have received support from more than 30 funds and industry groups.
The plans are backed by non-profit body the Coalition for a Digital Economy (Coadec) and networking group Capital Enterprise.
Dom Hallas, of Coadec, said: “We want people to get behind a broad solution for the companies and we need a solution now.
“A number of companies that were raising now risk going out of business.
“This is a not-for-profit plan.”