This former notorious red-light district is now one of the world’s top AI hubs

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0:50So you can focus on other important things, like savoring that last bit of pumpkin pie. From early startups to Fortune 500 companies, thousands are turning to Framer to build a website they'll love. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com slash tcstartups for 30 % off a Framer Pro annual plan. That's framer.com slash tcstartups for 30 % off. Rules and restrictions may apply. What every UK AI startup wants to know these days is how can I get office space in King's Cross? The area is so hot that a VC firm allegedly recently won a deal by promising a founder office space in the neighborhood, saying we stop at nothing to win deals for and to support founders, including helping them source office space when needed.

1:44The neighborhood's popularity began back in 2016, when DeepMind, then newly acquired by Google, moved in. Soon after, a flood of AI startups followed, wanting to be around the Google DeepMind magic. Today, they hope to take advantage of the cluster of AI talent there. This has transformed King's Cross into one of the world's top AI hubs, rivaled only by San Francisco and Beijing. Around London, it's known by the sobriquet Knowledge Quarter, as it's home to names like OpenAI, Meta, Isomorphic Labs, CuspAI, Recursive, and a little farther down the road, Synthesium and Anthropic. The European Technology Network, or ETN, just moved into a glossy new office nearby, while University College London sits around the corner.

2:34Mixed in with the new developments are trendy food spots. Hop on a train from King's Cross and founders can be in Cambridge in 45 minutes to source talent, or can be in Paris in two hours to strike a deal. Who would have guessed that a little more than 20 years ago, this was one of the seediest areas in London? Hussein Kanji, an investor at Hoxton Ventures, said, in the 80s, crack and heroin made the area a major narcotics market, recalling syringes and tree trunks and gangs patrolling the streets. He added, in 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.

3:15Then, in the early 2000s, a real estate developer had a dream, and, well, now it is the AI hotbed of the United Kingdom. What a change, Kanji says. Around 18 months ago, his portfolio company BioCortex moved from the neighborhood Holborn to the Jellicoe building in King's Cross, hoping to be near the action. Nick Sharma, co-founder of BioCortex, said, Lots going on in London right now. Lots of hyperscalers moving in. That includes, reportedly, Jeff Bezos' AI company Prometheus, which is also said to be in talks to move into the Jellicoe. There are around 3 ,600 AI startups in London, which, together, have raised around $12.1 billion out of the$14.8 billion raised in the city since late July.

4:05That's according to deal room. Since the start of June, AI-related startups have leased more than 1 million square feet of office space in London, according to the real estate firm Night Frank. With that, prime rents in King's Cross have risen 18 percent of the past three years, Chris Dunn, a commercial insight associate at the firm, said. That percentage represents only the largest leases encompassing at least 10 ,000 square feet, like the ones OpenAI and Prometheus are signing. The shorter deals go for even more, he said, and now the vacancy rate for conventional office space is less than 1%.

4:42Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropik shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude, we'd better look after ourselves, says Saul Klein, co-founder of the VC firm Phoenix Court. Phoenix Court is located in the King's Cross area and has three portfolio companies in the vicinity. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos Access was a small but sharp reminder that Europe cannot simply rent its AI capabilities and capacity. It needs to build and hold some of its own.

5:21King's Cross, he said, is where much of this building is actually happening. The bigger question, he said, is whether the UK builds the infrastructure, compute, energy, capital, to make this self-reliance durable rather than just hosting outposts of US labs. Simon Cole, founder of Latent Labs, has offices in King's Cross and San Francisco. The London office at the moment is growing faster, and he's more bullish than ever on the ecosystem. He said, the mood right now feels less like London trying to catch up and more like London becoming one of the default places to start a serious AI company. Look around and you are likely to see Wave testing its autonomous cars.

6:05Founded back in 2017 by co-founder Alex Kendall, the unicorn is one of London's biggest success stories. Kendall said, 10 years ago, building a frontier AI company from London felt like an unusual choice. Now it feels like an obvious one. Wave moved into King's Cross in 2018, looking for a space that could double as a garage, a rare combination in central London. He has watched the ecosystem mature around him, and it's now evident that a startup can stay in London, raise serious capital, hire world-class AI talent, and remain globally competitive. Down the street from Anthropik's new 158 ,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.

6:52Lara Gonzalez-Flores, Synthesia's chief of staff and head of people, says the company moved into its glossy new office building a year ago to accommodate its growing team. They were drawn to the area for the same reason as everybody else. It's very close to the airport, very close to where a lot of investors are. Around two-thirds of Synthesia's engineers are remote, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. She said, from London, we can hire and work without any problem people from anywhere, from Slovenia to Portugal. Unsurprisingly, London's AI boom is also causing a talent war.

7:33UK AI job postings have skyrocketed in the past few years, per data from PwC. When Anthropic announced it moved into town earlier this year, it listed, for example, a salary range of£260 ,000 to£630 ,000 for a machine learning research engineer, when the average salary in London for the same role is around£102 ,000. pounds. Some founders in the UK, like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up. Zane Ali, founder of the King's Cross-based AI legal firm Centuro, said the real test is whether more globally significant AI companies are founded, funded, and scaled from the UK while continuing to attract the world's best talent to build them here.

8:22If that continues to happen, King's Cross won't just be an AI hub. It'll become one of the UK's most important strategic assets. That's all for now. For the latest in startup tech news, go to TechCrunch.com.

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