The findings, from the report The Innovation Race: Reducing Risk and Navigating the AI Frontier for Future Success, reveal that while nearly all surveyed organisations intend to adopt AI, 88% anticipate that AI-generated data will soon surpass the capacity of their current datacentres. Additionally, 78% express concerns that their existing infrastructure will struggle to keep pace with AI advancements.

The report underscores that while AI holds great potential for driving UK innovation, progress is being stymied by the need for substantial infrastructure upgrades, rising energy costs, skills shortages, and the ongoing pressures of daily operations.

Nevertheless, businesses are moving forward, with many already integrating AI or planning to do so. Notably, 42% have adopted an AI-first strategy, ensuring that AI is considered in every new initiative.

Matt Smith, Managing Director of Technology Transformation & CIO: "AI is a core driver of business transformation for many organisations, but it's vital they have the infrastructure and expertise to support future AI growth. Given the speed of evolution we have seen already with AI, businesses should prioritise the upskilling and reskilling of staff, as well as recruiting AI experts to harness its benefits and lead implementation projects.

"The safe adoption AI can enhance productivity across the workforce and create new job opportunities, rather than displacing existing ones, and should be viewed as a tool to compliment workers, facilitating greater efficiency and innovation."

Sachin Agrawal, UK Managing Director at Zoho, commented: “With 91% of UK IT leaders recognising AI as a transformative opportunity, there is continued pressure to invest in AI technologies. While AI is already playing a significant role in many UK businesses, it's clear that obstacles such as skills shortages, infrastructure limitations, and rising energy costs are threatening progress and innovation.

“To unlock AI’s full potential, businesses must prioritise building digital skills across the workforce. The rapid adoption of AI demands a strong foundation in data management and analysis, which is why collaboration between government, industry, and education is essential to filter these skills across the workforce. Bootcamps focusing on AI-related skills, such as data science and software development, can help create a pipeline of talent that UK businesses need to unlock further benefits.

“Moreover, the SaaS industry plays a crucial role in democratising the use of AI and data. By providing user-friendly software, we can empower all employees – not just technical experts – to leverage AI in ways that are relevant to their roles. This not only maximises the benefits of AI but also enhances overall business success.

“Businesses should also understand that not every application of AI demands using a large language model, which commands the greatest computational power. Small and medium language models can also be used in some use cases to drive automation and improve business processes. This could help to ease the creaking infrastructure.

“As UK businesses navigate the pressures of innovation, security, and energy costs, it’s vital that we strike a balance between these priorities. By addressing skills gaps and infrastructure needs, we can safeguard the future of AI innovation and ensure that UK businesses remain competitive on the global stage.”