Manchester has been ranked the United Kingdom’s most AI-ready city for the third year in a row, highlighting the continued expansion of artificial intelligence beyond London as regional centres compete to attract technology businesses, investment and skilled workers.
The latest SAS AI Cities Index 2026, now in its fifth year, evaluates cities outside the capital using eight measures, including AI employment, business activity, innovation funding, education, broadband connectivity and research strength.
Manchester secured the top position thanks to its growing technology ecosystem. The city is home to 655 AI-related businesses, the highest number recorded in the index, representing 2.8% of all businesses in the area. It also ranks among the strongest locations for AI employment outside London, with nearby Salford and its MediaCity development contributing to the region’s technology workforce.
Funding has also played an important role in Manchester’s performance. According to the report, businesses in the city receive average Innovate UK grants for AI and the data economy worth more than £279,000 each. Manchester City Council has also approved a budget exceeding £1 billion, aimed at supporting infrastructure projects and long-term economic development.
Education and workforce development continue to strengthen the region’s position. A partnership between Salford-based IN4 Group and the Greater Manchester Combined Authority will establish new MEGA hubs, providing technology education and AI training to more than 3,000 secondary school students. The programme will include an AI Academy with planned sites in Rochdale, Salford, Tameside and Wigan.
Additional initiatives such as the five-year, £5 million Future of Work Alliance and the University of Manchester’s Unit M Deep Tech Accelerator are designed to support innovation, entrepreneurship and advanced technology research. Manchester has also recently been recognised as the leading UK city outside London for women founders.
The latest rankings also show growing momentum across other regions. Bristol climbed from fourth to second place, supported by strong research funding and its semiconductor industry. Birmingham moved up to fifth after recording the largest number of AI-related university courses among the cities surveyed.
Derby entered the top 20 for the first time, posting the highest average Innovate UK funding per business at more than £2.6 million. Southampton recorded one of the biggest improvements, rising 19 places into the top 10 after receiving average AI-related innovation funding of around £330,000 per business.
SAS Senior Director of Education Services for Europe, the Middle East and Africa, Glyn Townsend, said the rankings show AI development is spreading across the country rather than remaining concentrated in London. He said cities such as Southampton and Derby demonstrate how investment in artificial intelligence can create jobs, expand opportunities and support long-term economic growth.
The UK government is also increasing its support for AI adoption. AI Minister Kanishka Narayan said more than £200 million has been allocated to encourage responsible AI use across businesses and industries. SAS is also a founding partner in the government’s programme to help train 10 million workers in AI skills by 2030 through free learning resources and expert guidance.
