London is being eclipsed by excited talk of “Manchesterism”, as the UK's political commentators obsess over the imminent biggest by-election in history. But whatever the outcome of this freakish British electoral event, the country's centre of gravity will pull back to London; Manchesterism will go the way of Levelling Up and all other attempts at post-war regional policy. As far as the administrative class is concerned, it's only London that matters.
And from an investor's perspective, there are two very distinct Londons. One is in Westminster, in the headlines every day: a government running on fumes, a prime minister with over 90 of his own MPs calling for his head, and a chancellor whose every announcement sends gilt yields twitching.
The other London barely gets mentioned. Five stops and one line change north of SW1 at King's Cross, the atmosphere couldn't be more different. If you are an investor trying to work out where British prosperity is going to come from in the next 20 years, this is where you should be looking. As bond investors keep Westminster on a necessarily tight leash, venture capital is beating a path to King's Cross.
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The data is remarkable. AI firms' office leasing in London rose roughly tenfold year-on-year in April 2026. In the past year, OpenAI signed a lease for 88,500 square feet at Regent Quarter, its first permanent London office; Anthropic took 158,000 square feet at Regent's Place, quadrupling its UK headcount from 200 to 800; and Databricks pre-let 136,000 square feet in Fitzrovia. Microsoft took 100,000 square feet in Soho.
UK-wide, start-ups raised $7.8 billion in the first quarter of 2026, a 60% annual increase, with AI accounting for 74% of the sum raised. The UK comprised 41% of all European venture capital, outpacing France, Germany, and the Netherlands combined. London now hosts more AI firms with 50 or more employees than San Francisco.
London's AI flywheel is turning
This is not a blip, but the formation of a cluster, in the economist Enrico Moretti's sense of the term. Skilled workers attract capital; capital attracts more skilled workers; infrastructure builds around them. Once formed, clusters become self-reinforcing regardless of prevailing politics. London has 20,000 AI engineers, more than double the figure of any other European city. London's AI flywheel is turning. Global capital might restrain Westminster, but it is writing the cheques for Anthropic to hire engineers in Regent's Place.
Former hedge-fund manager Eric Renander, known online as Erik@YWR, said the Seattle technology cluster started mainly because Bill Gates wanted to go home in 1975. More recently, in 2014, Demis Hassabis did the same for London, making it a condition of Google's acquisition of DeepMind that it remain in London forever. His passionate sense of place, as documented in the biography The Infinity Machine and the documentary The Thinking Game, has rotated London's AI flywheel, and quietly, the UK is starting to benefit.
Hassabis's personal journey maps perfectly onto what American author Robert Greene described as the path to mastery. Hassabis's primal inclination was an early fascination with chess, becoming a prodigy by the age of four. He later served multiple apprenticeships in adjacent disciplines. At 17, he led the development of the cult simulation game Theme Park, then earned a double first in computer science from Cambridge, and founded Elixir Studios. While most ambitious technologists would have stopped at “successful games entrepreneur”, Hassabis then pursued a PhD in cognitive neuroscience – a classic mastery move, stepping sideways into a deeper layer of the problem rather than chasing the linear path.
Greene argues that masters eventually produce work that reshapes their field. And in 2020, DeepMind's AlphaFold project solved biology's protein-folding prediction challenge at a scale previously considered impossible. For this, Hassabis and his colleague, John Jumper, were awarded the 2024 Nobel Prize in Chemistry. This was a defining moment in lateral thinking: a computer scientist was awarded chemistry's highest honour for solving one of biology's biggest problems.
Meanwhile, in Westminster, Keir Starmer, whose constituency ironically includes King's Cross, is living on borrowed time. Andy Burnham, the PM-in-waiting, spent his first week of the unofficial leadership campaign performing several U-turns, including abandoning previous borrowing commitments, acknowledging that he, too, is in hock to bond markets.
However, the Ming vase issue for Burnham is Europe, and the question of whether Britain should rejoin the EU. The main way he navigated this delicate subject in a hugely pro-Brexit constituency was instead to rewind four decades. His attack on Thatcherism is reminiscent of Japan's imperial soldiers found on remote Pacific islands a decade after Tokyo's surrender, unaware their war was over, and the world had moved on.
Today, King's Cross is witness to growth and dynamism, driven by mastery of lateral thinking and risk-taking, largely the result of one man setting the flywheel of self-sustaining success in motion. And London has become a magnet for global risk capital. A short tube ride away is a backwards-looking, linear-thinking Westminster increasingly governed by its capital providers. Yet in decades to come, the shape and prosperity of London, and by extension the UK, will owe more to Hassabis' mastery of his domain in N1 than anything that comes out of SW1, let alone Manchester.