The future of physical games is not looking greatThis is The Stepback, a weekly newsletter breaking down one essential story from the tech world. For more on video games and physical media, follow Jay Peters. The Stepback arrives in our subscribers’ inboxes on Sunday at 8AM ET. Opt in for The Stepback here.
As a kid, I relished trips to Best Buy, GameStop, and the nearby mall so that I could browse video games. I loved sifting through games and chatting with my friends at the store about upcoming releases. On the lucky days I actually got a new game from the store, I treasured reading through every page of the manual on the drive home. Over the years, I built up a collection of games that I was proud of.
That was a long time ago. Shortly after college, I sold my collection of older games and hardware because I wasn’t using them and wanted the money for other things. (Probably weekends out.) Starting with the Nintendo Switch in 2017, I started buying games digitally because it was easier to just download stuff, and I wouldn’t have to accumulate physical game cases. Now, I don’t own any physical games: My Switch, PlayStation, Xbox, and Steam libraries are all digital.
I’m not the only player who has moved to mostly digital games. Digital libraries are increasingly convenient, especially as console makers have made efforts to keep backwards compatibility across generations. Some players can’t play physical games at all, as PlayStation and Xbox launched the PS5 and Xbox Series consoles with all-digital console options that were cheaper than the versions with disc drives. On PC, digital libraries through platforms like Steam have been the reality for quite some time. Capcom, one of the biggest publishers around, reported that an astounding 93 percent of its game sales were for digital copies in its last fiscal year — a figure that it expects will rise to 95.4 percent over the fiscal year. Many of the most popular games are only available digitally, like Roblox and Fortnite.
For better or worse, video game players overwhelmingly buy and play digital games. But in the span of a week, two industry giants put nails in the coffin of physical games — or perhaps even poured concrete into the grave.
On June 24th, Rockstar Games finally put a price tag on Grand Theft Auto VI ahead of its scheduled November 19th release on PS5 and Xbox Series X / S: $79.99 for the base edition and $99.99 for the Ultimate Edition. The prices themselves weren’t too unexpected, as even Nintendo has dabbled with $79.99 games for its biggest titles. But what was more shocking was something buried in Rockstar’s post: The physical version of the game won’t have a disc, instead containing a download code in the box.
The announcement was a worrying sign for physical games. Selling games as codes in a box isn’t a new concept, but GTA VI will be the biggest game to do it so far. Rockstar’s choice could push more publishers to do the same for their future titles. By making the game only available on digital storefronts, players can’t easily share it with a friend or sell the game when they’re done with it.
It’s also becoming increasingly clear you can’t rely on digital storefronts. Titles can get pulled for things like licensing or the store closing down. This may not be a problem for GTA VI, as Rockstar will almost certainly make sure the game is easily available on many digital platforms for the foreseeable future, especially if it wants to give the game the same kind of legs as the 13-year-old GTA V. But with digital storefronts, you also have to hope that you aren’t locked out of your account, even by mistake, and lose access to your games. (In 2023, some PlayStation users were unexpectedly banned through no fault of their own, though Sony eventually restored access to their accounts.)
Speaking of PlayStation, just days after Rockstar’s news, Sony dropped an even bigger bomb: It announced that, starting January 2028, it would not make physical discs for any new PlayStation games.
The decision led to widespread criticism online. Sony and PlayStation got yelled at everywhere online, as Kotaku reported, and the PlayStation account didn’t make a new tweet until six days after its announcement about dropping discs. The comments section of Sony’s famous 2013 PS4 game sharing ad where one person just hands a disc to another — an ad made after Xbox announced restrictive DRM plans for the Xbox One — is filled with new comments taking jabs at Sony. Heck, Sony itself showed why killing discs is a terrible idea by, on the same day as the disc news, saying that it would be closing the digital stores for the PS3 and the PS Vita.
Sony’s announcement also drew criticism from retailers and games preservationists. “This is unfortunate news for those who still prefer buying games on physical media, and is certainly a significant hit to consumer rights, the resale market, and game creators whose businesses rely on the physical market,” said Frank Cifaldi, executive director of the Video Game History Foundation.
Sony’s own statement was clear as to why it’s making the change. “This is a natural direction for Sony Interactive Entertainment to adapt to consumer trends as the general preference for digital media significantly outpaces physical discs,” Sony said in its announcement. “This transition will enable us to align more closely with how most of our community prefers to access and play games today.” The company’s numbers prove it, too: In the fourth quarter of its 2025 fiscal year, Sony reported that the “Full game software digital download ratio” of games on PS4 and PS5 was 85 percent.
We have to see if Grand Theft Auto VI actually releases on November 19th and if it will ever come out on disc. Despite two major delays, it seems likely the game will at least launch as planned, especially because Rockstar gave the game a price and is pushing preorders.
We’ll also have to see what Microsoft and Nintendo might do. Xbox hasn’t announced what it’s thinking about for discs for Project Helix, its next generation console, but The Verge’s Tom Warren reports that Xbox will “likely soon” stop making physical discs for Xbox games. However, Warren reports that the company is testing a feature that would let you digitize your physical game collection.
Nintendo will probably stick with physical games for a while. According to its last fiscal year report, digital makes up 54.6 percent of game sales, so physical is still a big part of its business. The Switch 2 is also only a year old, and it seems extremely unlikely that Nintendo would stop making physical games for hardware it will be supporting for a long time to come. However, with the Switch 2, Nintendo gives developers the option to sell game-key cards, which are physical carts you can borrow and resell but don’t actually have a game’s data on them. Instead, they serve as keys to let you download a game to your system.
Game stores and preservationists also have to adjust to the fact that physical games are going to be harder to come by. Cifaldi noted that museums and archives have already been preparing for this kind of future “with the expectation that putting discs on a shelf isn’t going to be a long-term solution for preserving new games.” But he called on trade groups to offer solutions to legally preserve digital content for research — efforts that the Entertainment Software Association has previously opposed. “The industry needs to meaningfully come to the table on this issue, because asking museums to download a copy of Grand Theft Auto VI and hope it’ll run in 50 years is not a preservation solution,” Cifaldi says.
Sony now has to navigate an awkward period where it’s launching new games but dealing with pushback from players wanting physical discs. While Sony has been subject to severe blowback after its announcement, it seems unlikely it will reverse course. It’s already repurposing its last PlayStation disc-making factory, after all.
- The PS5 Pro, Sony’s top-end PlayStation, does not come with a disc drive; that costs an additional $79. Following a recent price hike that spiked the PS5 Pro’s cost to $899.99, that means a PS5 Pro with a disc drive costs nearly $1,000.
- PlayStation’s own studios are now in the awkward spot of having to confirm that physical versions will be on disc, as Insomniac has for September’s Marvel’s Wolverine and Santa Monica Studio did for God of War Laufey. That Laufey confirmation also signals that the game, which hadn’t been given a release window, will launch before January 2028.
- For music, physical media sales — including CDs — are reportedly on the rise.
- Comedian Trevor Noah weighed in on PlayStation’s news, saying that “for a lot of gamers physical discs are the only way they could afford to play games because they could get them secondhand. You can also give games to your younger siblings, which is a great way to introduce them to the games you were playing.”
- In a post titled “Sony Nerfs Videogame Ownership,” the Electronic Frontier Foundation points out that “Unlike other digital media like film and TV, video games require a ton of storage. Access to high speed internet is still abysmal in the US, making the high-speeds needed for digital game downloads a luxury some of us may take for granted.”
- A day after the GTA VI news, Circana analyst Mat Piscatella posted a chart that neatly sums up what’s going on: sales of physical games peaked long ago, back in 2009.
Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates.
#future #physical #games #greatColumn,Gaming,The Stepback
This is The Stepback, a weekly newsletter breaking down one essential story from the tech world. For more on video games and physical media, follow Jay Peters. The Stepback arrives in our subscribers’ inboxes on Sunday at 8AM ET. Opt in for The Stepback here.
As a kid, I relished trips to Best Buy, GameStop, and the nearby mall so that I could browse video games. I loved sifting through games and chatting with my friends at the store about upcoming releases. On the lucky days I actually got a new game from the store, I treasured reading through every page of the manual on the drive home. Over the years, I built up a collection of games that I was proud of.
That was a long time ago. Shortly after college, I sold my collection of older games and hardware because I wasn’t using them and wanted the money for other things. (Probably weekends out.) Starting with the Nintendo Switch in 2017, I started buying games digitally because it was easier to just download stuff, and I wouldn’t have to accumulate physical game cases. Now, I don’t own any physical games: My Switch, PlayStation, Xbox, and Steam libraries are all digital.
I’m not the only player who has moved to mostly digital games. Digital libraries are increasingly convenient, especially as console makers have made efforts to keep backwards compatibility across generations. Some players can’t play physical games at all, as PlayStation and Xbox launched the PS5 and Xbox Series consoles with all-digital console options that were cheaper than the versions with disc drives. On PC, digital libraries through platforms like Steam have been the reality for quite some time. Capcom, one of the biggest publishers around, reported that an astounding 93 percent of its game sales were for digital copies in its last fiscal year — a figure that it expects will rise to 95.4 percent over the fiscal year. Many of the most popular games are only available digitally, like Roblox and Fortnite.
For better or worse, video game players overwhelmingly buy and play digital games. But in the span of a week, two industry giants put nails in the coffin of physical games — or perhaps even poured concrete into the grave.
On June 24th, Rockstar Games finally put a price tag on Grand Theft Auto VI ahead of its scheduled November 19th release on PS5 and Xbox Series X / S: $79.99 for the base edition and $99.99 for the Ultimate Edition. The prices themselves weren’t too unexpected, as even Nintendo has dabbled with $79.99 games for its biggest titles. But what was more shocking was something buried in Rockstar’s post: The physical version of the game won’t have a disc, instead containing a download code in the box.
The announcement was a worrying sign for physical games. Selling games as codes in a box isn’t a new concept, but GTA VI will be the biggest game to do it so far. Rockstar’s choice could push more publishers to do the same for their future titles. By making the game only available on digital storefronts, players can’t easily share it with a friend or sell the game when they’re done with it.
It’s also becoming increasingly clear you can’t rely on digital storefronts. Titles can get pulled for things like licensing or the store closing down. This may not be a problem for GTA VI, as Rockstar will almost certainly make sure the game is easily available on many digital platforms for the foreseeable future, especially if it wants to give the game the same kind of legs as the 13-year-old GTA V. But with digital storefronts, you also have to hope that you aren’t locked out of your account, even by mistake, and lose access to your games. (In 2023, some PlayStation users were unexpectedly banned through no fault of their own, though Sony eventually restored access to their accounts.)
Speaking of PlayStation, just days after Rockstar’s news, Sony dropped an even bigger bomb: It announced that, starting January 2028, it would not make physical discs for any new PlayStation games.
The decision led to widespread criticism online. Sony and PlayStation got yelled at everywhere online, as Kotaku reported, and the PlayStation account didn’t make a new tweet until six days after its announcement about dropping discs. The comments section of Sony’s famous 2013 PS4 game sharing ad where one person just hands a disc to another — an ad made after Xbox announced restrictive DRM plans for the Xbox One — is filled with new comments taking jabs at Sony. Heck, Sony itself showed why killing discs is a terrible idea by, on the same day as the disc news, saying that it would be closing the digital stores for the PS3 and the PS Vita.
Sony’s announcement also drew criticism from retailers and games preservationists. “This is unfortunate news for those who still prefer buying games on physical media, and is certainly a significant hit to consumer rights, the resale market, and game creators whose businesses rely on the physical market,” said Frank Cifaldi, executive director of the Video Game History Foundation.
Sony’s own statement was clear as to why it’s making the change. “This is a natural direction for Sony Interactive Entertainment to adapt to consumer trends as the general preference for digital media significantly outpaces physical discs,” Sony said in its announcement. “This transition will enable us to align more closely with how most of our community prefers to access and play games today.” The company’s numbers prove it, too: In the fourth quarter of its 2025 fiscal year, Sony reported that the “Full game software digital download ratio” of games on PS4 and PS5 was 85 percent.
We have to see if Grand Theft Auto VI actually releases on November 19th and if it will ever come out on disc. Despite two major delays, it seems likely the game will at least launch as planned, especially because Rockstar gave the game a price and is pushing preorders.
We’ll also have to see what Microsoft and Nintendo might do. Xbox hasn’t announced what it’s thinking about for discs for Project Helix, its next generation console, but The Verge’s Tom Warren reports that Xbox will “likely soon” stop making physical discs for Xbox games. However, Warren reports that the company is testing a feature that would let you digitize your physical game collection.
Nintendo will probably stick with physical games for a while. According to its last fiscal year report, digital makes up 54.6 percent of game sales, so physical is still a big part of its business. The Switch 2 is also only a year old, and it seems extremely unlikely that Nintendo would stop making physical games for hardware it will be supporting for a long time to come. However, with the Switch 2, Nintendo gives developers the option to sell game-key cards, which are physical carts you can borrow and resell but don’t actually have a game’s data on them. Instead, they serve as keys to let you download a game to your system.
Game stores and preservationists also have to adjust to the fact that physical games are going to be harder to come by. Cifaldi noted that museums and archives have already been preparing for this kind of future “with the expectation that putting discs on a shelf isn’t going to be a long-term solution for preserving new games.” But he called on trade groups to offer solutions to legally preserve digital content for research — efforts that the Entertainment Software Association has previously opposed. “The industry needs to meaningfully come to the table on this issue, because asking museums to download a copy of Grand Theft Auto VI and hope it’ll run in 50 years is not a preservation solution,” Cifaldi says.
Sony now has to navigate an awkward period where it’s launching new games but dealing with pushback from players wanting physical discs. While Sony has been subject to severe blowback after its announcement, it seems unlikely it will reverse course. It’s already repurposing its last PlayStation disc-making factory, after all.
- The PS5 Pro, Sony’s top-end PlayStation, does not come with a disc drive; that costs an additional $79. Following a recent price hike that spiked the PS5 Pro’s cost to $899.99, that means a PS5 Pro with a disc drive costs nearly $1,000.
- PlayStation’s own studios are now in the awkward spot of having to confirm that physical versions will be on disc, as Insomniac has for September’s Marvel’s Wolverine and Santa Monica Studio did for God of War Laufey. That Laufey confirmation also signals that the game, which hadn’t been given a release window, will launch before January 2028.
- For music, physical media sales — including CDs — are reportedly on the rise.
- Comedian Trevor Noah weighed in on PlayStation’s news, saying that “for a lot of gamers physical discs are the only way they could afford to play games because they could get them secondhand. You can also give games to your younger siblings, which is a great way to introduce them to the games you were playing.”
- In a post titled “Sony Nerfs Videogame Ownership,” the Electronic Frontier Foundation points out that “Unlike other digital media like film and TV, video games require a ton of storage. Access to high speed internet is still abysmal in the US, making the high-speeds needed for digital game downloads a luxury some of us may take for granted.”
- A day after the GTA VI news, Circana analyst Mat Piscatella posted a chart that neatly sums up what’s going on: sales of physical games peaked long ago, back in 2009.
![This former notorious red-light district is now one of the world’s top AI hubs | TechCrunch
What every U.K. 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. “We stop at nothing to win deals [for] and to support” founders, “including helping them source office space when needed,” the firm told me when asked about the rumor, declining to confirm or deny any details.
The 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, Cusp AI, Wayne, Recursive, and, a little farther down the road, Synthesia and Anthropic. The European Technology Network (ETN) just moved into a glossy new office nearby, while University College London sits around the corner.
Mixed in with the new developments are trendy food spots like Hoppers and BAO. Hop 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?
“In the ’80s, crack and heroin made the area a major narcotics market,” Hussein Kanji, an investor at Hoxton Ventures, said, recalling syringes in tree trunks and gangs patrolling the streets. “In 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.” Then, in the early 2000s, a real estate developer had a dream and, well, “now it is the AI hotbed of the United Kingdom,” Kanji said. “What a change.” 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. “Lots going on in London right now,” Nik Sharma, co-founder of BioCorteX, told me. “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 .1 billion out of the .8 billion raised in the city since late July, according to Dealroom. 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 Knight Frank. With that, prime rents in King’s Cross have risen 18% over the past three years, Chris Dunn, a commercial insight associate at the firm, told me. 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 just 0.9%. “Demand has outstripped supply,” he continued.
Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropic shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude: “We’d better look after ourselves,” Saul Klein, co-founder of the VC firm Phoenix Court, told me.
Phoenix Court is located in the King’s Cross area and has three portfolio companies in the vicinity, including Olix (which just announced a .3 billion valuation), Early Health and CoMind. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos access was a “small but sharp reminder that Europe can’t simply rent its AI capabilities and capacity; it needs to build and hold some of its own.” King’s Cross, he said, is where much of this building is actually happening.
“The bigger question,” he continued, “is whether the U.K. builds the infrastructure, compute, energy, capital, to make this self-reliance durable, rather than just hosting outposts of U.S. labs.”
Image Credits:Phoenix Court
Top founders want to stay
Simon Kohl, 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,” he said. Look around and you are likely to see Wayve testing its autonomous cars. Founded in 2017 by co-founder Alex Kendall, the unicorn is one of London’s biggest success stories.
“Ten years ago, building a frontier AI company from London felt like an unusual choice,” Kendall told me. “Now it feels like an obvious one.” Wayve moved into King’s Cross in 2018 looking for a space that could double as a garage — “a rare combination in Central London,” Kendall said. 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, he said. Down the street from Anthropic’s new 158,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.
Laura Gonzalez Florez, 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 everyone else: “It’s very close to the airport … very close to where a lot of investors are,” she said.
Image Credits:Synthesia
Around two-thirds of Synthesia’s engineers are remote, Gonzalez Florez said, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. “From London, we can hire and work, without any problem, people from anywhere, from Slovenia to Portugal,” she said.
Unsurprisingly, London’s AI boom is also causing a talent war.U.K. 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. Some founders in the U.K., like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up.
“The real test is whether more globally significant AI companies are founded, funded, and scaled from the U.K., while continuing to attract the world’s best talent to build them here,” Zain Ali, founder of the King’s Cross-based AI legal firm Centuro, told me. “If that continues to happen, King’s Cross won’t just be an AI hub. It’ll become one of the U.K.’s most important strategic assets.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Thisformernotorious #redlight #districtis #nowone #worlds #top #hubs #TechCrunchUK](https://techcrunch.com/wp-content/uploads/2026/08/DM9A2852.jpg?w=680 "This former notorious red-light district is now one of the world’s top AI hubs | TechCrunch
What every U.K. 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. “We stop at nothing to win deals [for] and to support” founders, “including helping them source office space when needed,” the firm told me when asked about the rumor, declining to confirm or deny any details.
The 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, Cusp AI, Wayne, Recursive, and, a little farther down the road, Synthesia and Anthropic. The European Technology Network (ETN) just moved into a glossy new office nearby, while University College London sits around the corner.
Mixed in with the new developments are trendy food spots like Hoppers and BAO. Hop 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?
“In the ’80s, crack and heroin made the area a major narcotics market,” Hussein Kanji, an investor at Hoxton Ventures, said, recalling syringes in tree trunks and gangs patrolling the streets. “In 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.” Then, in the early 2000s, a real estate developer had a dream and, well, “now it is the AI hotbed of the United Kingdom,” Kanji said. “What a change.” 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. “Lots going on in London right now,” Nik Sharma, co-founder of BioCorteX, told me. “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 .1 billion out of the .8 billion raised in the city since late July, according to Dealroom. 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 Knight Frank. With that, prime rents in King’s Cross have risen 18% over the past three years, Chris Dunn, a commercial insight associate at the firm, told me. 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 just 0.9%. “Demand has outstripped supply,” he continued.
Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropic shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude: “We’d better look after ourselves,” Saul Klein, co-founder of the VC firm Phoenix Court, told me.
Phoenix Court is located in the King’s Cross area and has three portfolio companies in the vicinity, including Olix (which just announced a .3 billion valuation), Early Health and CoMind. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos access was a “small but sharp reminder that Europe can’t simply rent its AI capabilities and capacity; it needs to build and hold some of its own.” King’s Cross, he said, is where much of this building is actually happening.
“The bigger question,” he continued, “is whether the U.K. builds the infrastructure, compute, energy, capital, to make this self-reliance durable, rather than just hosting outposts of U.S. labs.”
Image Credits:Phoenix Court
Top founders want to stay
Simon Kohl, 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,” he said. Look around and you are likely to see Wayve testing its autonomous cars. Founded in 2017 by co-founder Alex Kendall, the unicorn is one of London’s biggest success stories.
“Ten years ago, building a frontier AI company from London felt like an unusual choice,” Kendall told me. “Now it feels like an obvious one.” Wayve moved into King’s Cross in 2018 looking for a space that could double as a garage — “a rare combination in Central London,” Kendall said. 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, he said. Down the street from Anthropic’s new 158,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.
Laura Gonzalez Florez, 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 everyone else: “It’s very close to the airport … very close to where a lot of investors are,” she said.
Image Credits:Synthesia
Around two-thirds of Synthesia’s engineers are remote, Gonzalez Florez said, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. “From London, we can hire and work, without any problem, people from anywhere, from Slovenia to Portugal,” she said.
Unsurprisingly, London’s AI boom is also causing a talent war.U.K. 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. Some founders in the U.K., like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up.
“The real test is whether more globally significant AI companies are founded, funded, and scaled from the U.K., while continuing to attract the world’s best talent to build them here,” Zain Ali, founder of the King’s Cross-based AI legal firm Centuro, told me. “If that continues to happen, King’s Cross won’t just be an AI hub. It’ll become one of the U.K.’s most important strategic assets.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Thisformernotorious #redlight #districtis #nowone #worlds #top #hubs #TechCrunchUK")
![This former notorious red-light district is now one of the world’s top AI hubs | TechCrunch
What every U.K. 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. “We stop at nothing to win deals [for] and to support” founders, “including helping them source office space when needed,” the firm told me when asked about the rumor, declining to confirm or deny any details.
The 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, Cusp AI, Wayne, Recursive, and, a little farther down the road, Synthesia and Anthropic. The European Technology Network (ETN) just moved into a glossy new office nearby, while University College London sits around the corner.
Mixed in with the new developments are trendy food spots like Hoppers and BAO. Hop 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?
“In the ’80s, crack and heroin made the area a major narcotics market,” Hussein Kanji, an investor at Hoxton Ventures, said, recalling syringes in tree trunks and gangs patrolling the streets. “In 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.” Then, in the early 2000s, a real estate developer had a dream and, well, “now it is the AI hotbed of the United Kingdom,” Kanji said. “What a change.” 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. “Lots going on in London right now,” Nik Sharma, co-founder of BioCorteX, told me. “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 .1 billion out of the .8 billion raised in the city since late July, according to Dealroom. 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 Knight Frank. With that, prime rents in King’s Cross have risen 18% over the past three years, Chris Dunn, a commercial insight associate at the firm, told me. 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 just 0.9%. “Demand has outstripped supply,” he continued.
Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropic shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude: “We’d better look after ourselves,” Saul Klein, co-founder of the VC firm Phoenix Court, told me.
Phoenix Court is located in the King’s Cross area and has three portfolio companies in the vicinity, including Olix (which just announced a .3 billion valuation), Early Health and CoMind. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos access was a “small but sharp reminder that Europe can’t simply rent its AI capabilities and capacity; it needs to build and hold some of its own.” King’s Cross, he said, is where much of this building is actually happening.
“The bigger question,” he continued, “is whether the U.K. builds the infrastructure, compute, energy, capital, to make this self-reliance durable, rather than just hosting outposts of U.S. labs.”
Image Credits:Phoenix Court
Top founders want to stay
Simon Kohl, 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,” he said. Look around and you are likely to see Wayve testing its autonomous cars. Founded in 2017 by co-founder Alex Kendall, the unicorn is one of London’s biggest success stories.
“Ten years ago, building a frontier AI company from London felt like an unusual choice,” Kendall told me. “Now it feels like an obvious one.” Wayve moved into King’s Cross in 2018 looking for a space that could double as a garage — “a rare combination in Central London,” Kendall said. 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, he said. Down the street from Anthropic’s new 158,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.
Laura Gonzalez Florez, 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 everyone else: “It’s very close to the airport … very close to where a lot of investors are,” she said.
Image Credits:Synthesia
Around two-thirds of Synthesia’s engineers are remote, Gonzalez Florez said, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. “From London, we can hire and work, without any problem, people from anywhere, from Slovenia to Portugal,” she said.
Unsurprisingly, London’s AI boom is also causing a talent war.U.K. 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. Some founders in the U.K., like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up.
“The real test is whether more globally significant AI companies are founded, funded, and scaled from the U.K., while continuing to attract the world’s best talent to build them here,” Zain Ali, founder of the King’s Cross-based AI legal firm Centuro, told me. “If that continues to happen, King’s Cross won’t just be an AI hub. It’ll become one of the U.K.’s most important strategic assets.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Thisformernotorious #redlight #districtis #nowone #worlds #top #hubs #TechCrunchUK](https://i0.wp.com/techcrunch.com/wp-content/uploads/2026/08/DM9A2852.jpg?w=680&ssl=1 "This former notorious red-light district is now one of the world’s top AI hubs | TechCrunch
What every U.K. 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. “We stop at nothing to win deals [for] and to support” founders, “including helping them source office space when needed,” the firm told me when asked about the rumor, declining to confirm or deny any details.
The 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, Cusp AI, Wayne, Recursive, and, a little farther down the road, Synthesia and Anthropic. The European Technology Network (ETN) just moved into a glossy new office nearby, while University College London sits around the corner.
Mixed in with the new developments are trendy food spots like Hoppers and BAO. Hop 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?
“In the ’80s, crack and heroin made the area a major narcotics market,” Hussein Kanji, an investor at Hoxton Ventures, said, recalling syringes in tree trunks and gangs patrolling the streets. “In 1982, the local church was occupied by the English Collective of Prostitutes for 12 straight days.” Then, in the early 2000s, a real estate developer had a dream and, well, “now it is the AI hotbed of the United Kingdom,” Kanji said. “What a change.” 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. “Lots going on in London right now,” Nik Sharma, co-founder of BioCorteX, told me. “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 .1 billion out of the .8 billion raised in the city since late July, according to Dealroom. 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 Knight Frank. With that, prime rents in King’s Cross have risen 18% over the past three years, Chris Dunn, a commercial insight associate at the firm, told me. 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 just 0.9%. “Demand has outstripped supply,” he continued.
Today, one of the big topics of the area is sovereignty. It was a wake-up call for many when Anthropic shut off access to Mythos and Fable this summer, leaving some in the ecosystem to conclude: “We’d better look after ourselves,” Saul Klein, co-founder of the VC firm Phoenix Court, told me.
Phoenix Court is located in the King’s Cross area and has three portfolio companies in the vicinity, including Olix (which just announced a .3 billion valuation), Early Health and CoMind. Robin Klein, co-founder of the firm, said the shutdown of Fable and Mythos access was a “small but sharp reminder that Europe can’t simply rent its AI capabilities and capacity; it needs to build and hold some of its own.” King’s Cross, he said, is where much of this building is actually happening.
“The bigger question,” he continued, “is whether the U.K. builds the infrastructure, compute, energy, capital, to make this self-reliance durable, rather than just hosting outposts of U.S. labs.”
Image Credits:Phoenix Court
Top founders want to stay
Simon Kohl, 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,” he said. Look around and you are likely to see Wayve testing its autonomous cars. Founded in 2017 by co-founder Alex Kendall, the unicorn is one of London’s biggest success stories.
“Ten years ago, building a frontier AI company from London felt like an unusual choice,” Kendall told me. “Now it feels like an obvious one.” Wayve moved into King’s Cross in 2018 looking for a space that could double as a garage — “a rare combination in Central London,” Kendall said. 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, he said. Down the street from Anthropic’s new 158,000-square-foot office is the AI agent builder Sierra and the AI video platform Synthesia.
Laura Gonzalez Florez, 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 everyone else: “It’s very close to the airport … very close to where a lot of investors are,” she said.
Image Credits:Synthesia
Around two-thirds of Synthesia’s engineers are remote, Gonzalez Florez said, letting the company tap into an affordable, international, and diverse talent pool and helping it scale faster. “From London, we can hire and work, without any problem, people from anywhere, from Slovenia to Portugal,” she said.
Unsurprisingly, London’s AI boom is also causing a talent war.U.K. 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. Some founders in the U.K., like those in Silicon Valley, are being forced to raise more and bigger rounds to keep up.
“The real test is whether more globally significant AI companies are founded, funded, and scaled from the U.K., while continuing to attract the world’s best talent to build them here,” Zain Ali, founder of the King’s Cross-based AI legal firm Centuro, told me. “If that continues to happen, King’s Cross won’t just be an AI hub. It’ll become one of the U.K.’s most important strategic assets.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Thisformernotorious #redlight #districtis #nowone #worlds #top #hubs #TechCrunchUK")
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