The report, conducted by independent consultancy, Strand Partners, and commissioned by AWS, reveals that AI adoption has grown by 33% in the past year, outpacing the European average (27%), and the uptake of other transformative technologies such as mobile phones during the early 2000s. Now, more than half (52%) of UK businesses are using AI – up from 39% last year – with the vast majority (92%) of businesses who have adopted AI reporting increased revenue. This is a noticeable increase from 2023, which showed that 64% of businesses reported increased revenue thanks to the adoption of AI.

An emerging two-tier economy

While AI adoption is growing, and it’s clear that AI yields demonstrable benefits for those who have adopted the technology, a gap is starting to emerge between the UK’s startups and large enterprises.

Over half (55%) of large enterprises reported they are consistently using the technology, up from 41% last year, however, their use of AI remains surface-level, meaning they are focused on basic efficiency gains. In contrast, startups are integrating AI into the centre of their business strategy, and using it to develop new products and services for their customers, and transform their industries. 59% of UK startups have adopted AI, and 36% said they’re developing new AI-driven products and services, compared to 25% of large enterprises.

Startups are also more likely to have developed a roadmap for realising the full benefits of AI adoption: 31% have a comprehensive AI strategy, compared to just 15% of large enterprises.

If this emerging gap is not addressed, there is a risk that a longtail of businesses, particularly large enterprises, may miss out on reaping the transformative benefits of AI. Given enterprises are responsible for 48% of UK turnover, this could prevent the UK from fully realising the economic, productivity, and competitive edge that AI can unlock.

Tackling barriers to deeper AI adoption

Tackling the barriers to AI adoption will be instrumental in helping all businesses across the UK to unlock the opportunity of AI. Businesses identified the digital skills gap as the biggest barrier to AI adoption – a gap which is continuing to widen. 38% of businesses reported that access to digital skills is preventing them from adopting AI, up from 29% of businesses surveyed last year.

Nearly half (46%) of UK businesses said that a lack of digital skills has slowed down their business, compared with 32% of UK businesses surveyed last year.

This lack of digital skills is becoming more important, as the demand for AI literacy increases. Businesses stated that AI literacy is expected to be required in nearly half (47%) of new UK jobs in the next three years, yet only 27% of UK businesses felt adequately prepared.

UK businesses reported that it takes them, on average, 5.5 months to hire an employee with the sufficient level of digital skills, while 41% of UK businesses said they are struggling to hire people equipped with the necessary digital skills.

AWS therefore encourages UK policymakers and industry leaders to take steps to help UK organisations unlock AI’s transformative potential and maintain momentum in implementing the recommendations in the UK AI Opportunities Action Plan, which is as follows:

• Empower businesses with resources and talent to accelerate AI adoption: to fully unlock AI’s potential, the UK must establish a self-sustaining cycle of investment, innovation, and workforce development, and ensure that businesses have both the resources and digitally skilled talent needed for AI adoption. By taking steps to close the digital skills gap and enable stronger collaboration with external experts, the UK can equip its businesses with the capabilities they need to innovate, scale, and stay competitive in an AI-driven economy
• Scale AI across public services: the UK Government has the opportunity to position itself as a digital leader through the adoption of AI. The Government’s own analysis indicates that over £45 billion per year in unrealised savings and productivity benefits could be achieved through full potential digitisation of public sector services. By embedding AI across public services, the UK Government can lead by example and set a powerful precedent for innovation across the economy
• Ensure startups have the necessary funding to increase AI adoption: access to funding is a key enabler for startups in their adoption of AI and their business growth. The UK must continue to foster its already vibrant funding ecosystem for startups, and build on its current position as a leader in European venture capital funding

“The UK is experiencing an AI revolution that is outpacing historical technology trends,” said Phil Le-Brun, Director of Enterprise Strategy at AWS. “The report reveals that at least one business is adopting AI every minute. While this is encouraging to see, it masks a deeper challenge. If we don’t address the key barriers to adoption in the UK – most notably digital skills – we risk the emergence of a two-tier AI economy. This could result in a longtail of businesses missing out on the transformative benefits of AI, which could, in turn, prevent the UK from fully realising the economic, productivity, and competitive edge that AI can unlock.”

AWS’s continued commitment to UK

AWS first launched an AWS Region in the UK in December 2016, and over the last few years, the company has continued to expand the Region to include three Availability Zones (AZ), two WaveLength Zones, two Edge Locations, and a Regional Edge Cache.

Last September, Amazon announced plans to invest £8 billion over the next five years (2024-2028) building, operating, and maintaining data centres in the UK. This investment is part of the company’s long-term commitment to supporting growth and productivity across the country, and is estimated to contribute £14 billion to the UK's total Gross Domestic Product (GDP) through to 2028, and support an average of more than 14,000 full-time equivalent (FTE) jobs on an annual basis at local UK businesses.

Today, organisations of all sizes and across all industries are using AWS to lower costs, become more agile, and innovate faster – from the fastest growing startups, to small and medium-sized businesses (SMBs), to the largest enterprises, public sector organisations, educational institutions, and government agencies.