Manchester has been named the UK’s most AI-ready city for the third consecutive year, underscoring a shift in the national AI economy away from London.
The annual AI Cities Index ranks cities outside the capital across eight criteria, including AI job opportunities, innovation funding, education, broadband speed, and sector business activity.
Manchester retains the top position through substantial commercial depth. The city is home to 655 AI businesses, the highest of any location in the index, accounting for 2.8 per cent of its total business landscape.
It also records some of the strongest AI employment outside London, trailing only neighbouring Salford and its Media City cluster.
For business founders, the funding environment is a key consideration. Innovate UK grants for AI and the Data Economy average more than £279,000 per business in Manchester.
The city council has approved a budget exceeding £1 billion for the first time, directed at infrastructure and long-term growth.
A deliberate talent pipeline is taking shape. New technology hubs developed with regional authorities will provide over 3,000 secondary pupils with technology learning and AI academy access across Rochdale, Salford, Tameside, and Wigan.
Additional support includes a five-year £5 million future of work alliance and a university deep tech accelerator. Manchester was also recently recognised as the best city outside London for women founders.
The broader regional movement presents opportunities for smaller businesses elsewhere. Bristol rose from fourth to second, driven by strong research funding and its semiconductor cluster.
Birmingham climbed to fifth with the highest number of AI-related university courses, while Derby entered the top 20 for the first time with the highest average Innovate UK funding per business at over £2.6 million.
Southampton jumped 19 places into the top ten, supported by average Innovate UK backing of £330,000 per business.
The widening regional spread highlights concerns that smaller firms risk falling behind on AI adoption and that UK businesses underinvest relative to global leaders.
Infrastructure is increasingly accessible to SMEs across the country; the decisive factor is whether they engage with it.
A senior education services director noted that development in multiple cities proves AI excellence is no longer London-centric, with rising rankings showing how local economies use the technology to boost jobs and growth.
A founding partner in the government’s programme to train 10 million workers in AI skills by 2030 is providing free training materials and expert access to businesses.
The AI minister at the Department for Science, Innovation and Technology stated that more than £200 million is allocated to drive responsible AI adoption across every part of the country.
