The technology has received an overwhelmingly positive reception from SME founders and executives, with 89% viewing it as an opportunity, and only a handful (7%) seeing it as a potential threat.

Headline findings include:

• 64% of SME leaders see AI as a very significant opportunity for their business, while an additional 25% consider it as a potential opportunity
• One in three companies have allocated budgets for AI, with nearly 40% intending to do so in the next year
• Over 50% say they have the necessary AI expertise within their teams
• A quarter of companies are already using generative AI in production, while only 11% say they are not yet considering it

Areas where the new technology is being rapidly adopted include customer service, data analytics, and content creation. Tools such as chatbots and virtual assistants are automating manual processes or allowing businesses to offer new services they had been previously unable to provide. AI has also presented opportunities to boost operational efficiencies, helping SMEs stay competitive.

AI is further strengthening many SMEs in areas where they lacked in-house expertise, such as marketing and data analysis. Others are adopting the technology in fields where they have previously relied on external consultants, including training and recruitment.

Panthera BioPartners, a clinical trials operator backed by BGF since 2022, is actively embracing the use of AI. The company is examining how AI could streamline patient recruitment, improve trial accuracy, and accelerate study timelines. “The introduction of generative AI, especially through advancements in large language and image and video generation, presents a significant opportunity for our business,” said Stuart Young, its CEO.

Financial commitments into AI vary. About 25% of businesses are hesitant to allocate funds due to competing priorities or uncertainty about AI’s role in their operations. Some business leaders feel AI is already integrated, eliminating the need for a separate budget.

Despite widespread enthusiasm, concerns remain. Some SMEs flagged worries that AI will lower entry barriers to markets, intensifying competition. Around 15% cited concerns about cyber threats and data breaches. The rapid pace of the technology’s development, coupled with challenges around data governance and the costs of upskilling, has made some businesses particularly cautious.

Simon Steward, Head of Digital at BGF, commented: “AI adoption is critical for SME competitiveness. It’s encouraging to see how many SMEs feel they have the people and skills required to embrace AI technology. I think this is down to the intuitive nature of AI tools – how naturally they integrate with current systems and how easily end users can interact with them. It also speaks to the forward-thinking nature of SMEs, the majority of which are constantly seeking innovative solutions to stay ahead of the curve and drive growth.”

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