Manchester to be named UK’s most AI-ready city in 2026, according to new research.
Manchester has topped the SAS AI Cities 2026 Index for the third year in a row, maintaining its leadership position due to its combination of education strength, business activity and AI employment.
The annual index, provided by data and AI company SAS, is now in its fifth year and assesses cities outside London along eight key criteria, including employment opportunities, innovation funding secured, education opportunities, broadband speeds and business activity in the AI sector.
Manchester’s top spot can be attributed to the high degree of integration of AI companies. Manchester has the highest number of AI businesses included in the index, with 655 organizations recorded, accounting for 2.8% of the overall business landscape.
Manchester also boasts one of the strongest levels of AI employment (AI-related jobs within a 5-mile radius) outside of London, coming in second overall behind neighboring Salford, which is likely to have an edge due to being home to Media City. There is also significant investment activity in the city from InnovateUK, with an average of more than £279,000 per company being paid out in AI and data economy grants.
The city also records a number of alumni accomplishments in computing and engineering fields. Interestingly, a new ‘MEGA hub’ is set to be rolled out as a collaboration between Salford-based IN4 Group and the Greater Manchester Integration Authority, giving more than 3,000 secondary school students access to technology learning and the AI Academy. This follows the launch in Oldham, with hubs set to be rolled out to Rochdale, Salford, Tameside and Wigan.
Further strengthening Manchester City’s commitment to driving AI integration within the city, the Future of Work Alliance, announced at the end of May, is a five-year, £5 million initiative focused on driving how human-led digital transformation in the AI era can be integrated into large data-intensive organizations. The scheme will focus on research challenges and offer tailored academic programmes, postgraduate internships, support for five AI-focused scholarships and a keynote lecture series.
Apart from advances in education, significant amounts of money are also being invested in Manchester’s business scene. The University of Manchester’s Unit M Deep Tech Accelerator was recently launched to help researchers and founders turn AI and scientific innovation into commercial businesses across areas such as AI, biotech and climate technology. Similarly, Manchester City Council has approved a budget of over £1 billion for the first time to support infrastructure, development and long-term growth initiatives.
Bristol has moved up from last year’s index, moving from fourth to second place. The city receives strong research and development funding, has excellent broadband infrastructure, and boasts one of the highest concentrations of AI-related businesses.
Like Manchester, Bristol’s strength lies in its collaboration with the University of Bristol and local technology companies. The collaboration will see the city of Bristol, home to one of the UK’s largest microchip and semiconductor companies, supporting the commercialization of research in areas such as machine learning, robotics and quantum technology.
Bristol’s AI maturity is only set to further strengthen as the University of Bristol recently announced plans to develop a new national AI data facility alongside Isambard-AI, the UK’s most powerful supercomputer.
Birmingham moved up from 6th to 5th place. This is primarily due to the city having the highest number of AI-related university courses and continuous growth in AI jobs and innovation activity.
Derby broke into the British top 20 for the first time, finishing 13th overall. Home to leading companies such as Rolls Roy and Network Rail, the city recorded the highest InnovateUK funding per business of all locations included in the index, securing more than £2.6 million per business.
Following in Derby’s footsteps, Southampton have moved up from 26th to 7th, making a significant leap into the top 10. A high proportion of council staff are in AI and data-related roles, and Southampton is also one of the best supported by InnovateUK, paying an average of £330,000 per company.
SAS Top 10 AI Cities in 2026
1 – Manchester
2 – Bristol
3 – Glasgow
4 – Oxford
5 – Birmingham
6 – Southampton
7 – Edinburgh
8 – Leeds
9- Liverpool
10 – Cambridge
Glyn Townsend, Senior Director of Education Services for Europe, Middle East and Africa at SAS, said:: “Manchester retaining its top spot for the third year in a row is testament to the strength of its AI ecosystem. Our previous research confirmed that Manchester is the best place for AI businesses to plant their flag, and as we look ahead to 2026, Manchester It is clear that we are actively working to grow our services and that our existing talent as well as our future talent is being trained to a standard that not only maintains but exceeds what is already happening.
“It’s great to see such progress in other cities, proving that excellence in AI doesn’t have to be London-centric. Cities like Southampton and Derby that have risen quickly in the rankings show that cities are recognizing how to embrace and leverage AI to create more jobs, increase opportunity and support long-term economic growth.”
“SAS is proud to be a founding partner of the UK Government’s initiative to train 10 million workers with the essential skills needed for AI and technology over the next five years as part of its transformation plan and future industrial strategy. SAS will provide businesses with free training materials and access to AI experts.”
Kanishka Narayan, Minister for AI in the Ministry of Science, Innovation and Technology, said:: “While Manchester should be congratulated for coming out on top for the third year in a row, what this report really shows is how AI is creating opportunities for learning, growth and innovation across the UK.
“We are bringing together British businesses, innovators and trade unions to unlock the potential of AI in the UK and are allocating more than £200m to drive responsible AI adoption in every region of the country.”
Readers can find the full report here.
methodology
SAS considered eight key indicators, including:
- Graduate performance in computing and engineering subjects according to HESA (Higher Education Statistics Agency)
- AI jobs within a 5-mile radius, according to Indeed.
- Average broadband speed available to businesses
- Innovate UK average funding per company based on AI and data economy funding (2025/26)
- Number of AI businesses in each city, according to LinkedIn
- Percentage of companies focused on AI (ONS company figures used to benchmark against LinkedIn figures)
- Number of council staff jobs that refer to AI, automation, digital transformation, data analytics or data scientists
- Number of university courses that refer to artificial intelligence, according to UCAS
Cities received weighted scores across all categories to arrive at an overall AI readiness score.
Data is correct as of 2026.
