Why London matters for your AI strategy

Over the past 18 months, US AI companies announcing their first international offices kept choosing London. Luma AI, Scale AI, Anthropic, Perplexity, Groq (that’s Groq with a "Q", an AI chip company founded by former Google engineers, not to be confused with Grok, the AI chatbot made by xAI, Elon Musk's AI company.)

These are independent decisions by competing companies arriving at the same conclusion: For a first international office, London beats every other option.

Luma AI, the generative video startup valued at $4 billion, opened its first office outside of California in London in December 2025, with plans to hire 200 people by 2027. Scale AI established its European headquarters there in May 2024. Anthropic tripled its EMEA headcount and reports that Europe has become its fastest-growing region, with annualized revenue growing more than 9x in one year. Groq invested roughly £100 million in its first UK data center. Perplexity committed £80 million to a London office expansion.

If you run a media company in Germany or continental Europe, this pattern should be on your radar. Not because London is inherently fascinating (although it is, of course!), but because it changes where you need to look for AI partnerships, talent, and early signals of what's coming.

The UK government made a deliberate choice to align with the U.S. rather than the EU on AI policy. Post-Brexit, the UK operates outside of the EU AI Act. Officials view Brussels as too bureaucratic and are courting Washington instead. Intelligence and military cooperation between the UK and U.S. runs deeper than equivalent German-US relationships, which builds trust for American companies considering where to expand.

Jason Day, who runs Luma AI's new London office, told LBBOnline: "One of the reasons that we're very positive about the UK being our regional headquarters is you've got successive governments, not just this government, but successive governments that have been very clear that they want the UK to be a hub for AI."

Anthropic's Chris Ciauri, Managing Director of International, told CNBC that demand extends beyond the private sector: "G20 governments are approaching us about doing really, really interesting things at a citizen enablement level."

London also has something most European cities lack: a decade-long head start. DeepMind trained a generation of AI researchers before Google acquired it in 2014. Two DeepMind scientists won the Nobel Prize in Chemistry in 2024. That talent pipeline still feeds the local ecosystem. CEO Demis Hassabis, explaining Google's recent £5 billion UK investment, put it simply: "We founded DeepMind in London because we knew the UK had the potential and talent to be a global hub for pioneering AI."

The homegrown companies are now reaching scale. Nscale raised €1.335 billion in September 2025, the largest Series B in European history, backed by Microsoft, OpenAI, and NVIDIA. Synthesia hit a $4 billion valuation for AI-generated video. Isomorphic Labs, spun out of DeepMind, raised $600 million for AI drug discovery. These companies were founded in London, not relocated there.

Synthesia's founding team included a German professor, but European investors initially rejected their vision. American investor Mark Cuban provided the initial funding. Much of the capital fueling London's AI ecosystem originates from the U.S., not from European sources.

From a practical perspective: London functions as an early warning system for what American tech companies will do next in Europe.

Google and other technology giants follow a consistent rollout pattern: first the United States, then English-speaking markets like the UK, then the broader EMEA region. If you monitor what's happening in London, you gain lead time to prepare for changes heading to Germany, France, and the rest of Europe.

The AI tools that will reshape your workflows, the partnerships that will matter, the talent you might want to hire: much of this will surface in London before it reaches Berlin or Munich. Media executives who track London closely can see disruptions coming months before they arrive.

One resource worth knowing: Charlie Beckett runs Journalism AI at the London School of Economics, a program funded by the Google News Initiative that has built a network of 15,000 media professionals working on AI adoption. For media executives seeking peer learning rather than vendor pitches, it offers structured frameworks on how newsrooms are approaching AI implementation. (I was a speaker at the Journalism AI Festival in November 2025)

UK AI startups raised $2.4 billion in the first half of 2025, representing 30% of all British venture capital. In the same period, UK startups (not exclusively AI) raised more total VC funding ($8 billion) than Germany ($4.4 billion) and France ($3.2 billion) combined, according to HSBC Innovation Banking and Dealroom data.

The picture is more nuanced when comparing London and Paris directly. Dealroom's 2024 data shows London startups raised $11.3 billion compared to Paris's $7.8 billion. But nearly half of Paris's funding went to AI companies, including large rounds for Mistral AI ($526 million), Poolside ($500 million), and Electra ($341 million). 

Both cities are pulling ahead of the rest of Europe. The UK government announced £24.25 billion in private AI investment commitments in a single month, alongside a £500 million Sovereign AI Unit and new AI Growth Zones designed to spread AI jobs beyond London. France launched "Choose France for Science" and hosted the AI Action Summit. Germany has strong engineering talent but has not matched the coordinated public investment that London and Paris have deployed.

Not every company sees London as the answer. 11x, which builds AI sales agents, relocated from London to San Francisco after raising its Series A. Keith Fearon, the company's head of growth, explained to Sifted: "There's just so much more VC money in the U.S. than any term sheet you get here, they're going to give you two or three times the valuation of what a European VC will give you."

Early-stage companies chasing high valuations and US customers still need Silicon Valley. The investor pressure to relocate remains strong for companies seeking aggressive growth funding. But established companies with global ambitions can afford London. And for European media executives, the question isn't where to incorporate a startup. It's where to find the AI capabilities that will matter for your business.

If you're a media executive in the U.S., this pattern matters for different reasons. London is becoming the path of least resistance for American companies expanding into Europe. The talent costs less than San Francisco, there is no language barrier and the regulatory environment is friendlier than Brussels. 

The time zone alignment helps. London is one hour behind Berlin. If you’re on the U.S. East Coast, you can head out overnight, have a morning meeting, fly back the same day, and not lose a week to jet lag.

But London is more than just a cost arbitrage play. The more interesting angle: BBC, Guardian, Financial Times, Reuters and The Eceonomist are all running significant AI initiatives, and their approaches are more legible from New York than what's happening inside German or French newsrooms. If you want to learn how legacy media organizations outside the U.S. are adapting to AI, London is where the observable experiments are happening.

That said, London is not a substitute for understanding continental Europe. The EU AI Act will shape how AI tools work for 450 million people. If your strategy requires European scale, you'll eventually need to engage with Brussels regardless of what happens in London.

The combination of homegrown success and inbound American investment creates a self-reinforcing cycle: Talent trained at DeepMind founds new startups, those startups attract capital, that capital draws more US companies seeking talent.

For media companies on both sides of the Atlantic, London is becoming increasingly important.