UK firms boost AI spending but lack strategic governance

Summarised from 2 outlets · 4 reports · Updated 15 Oct, 05:20 · Archive

UK businesses are spending record amounts on artificial intelligence but struggle with governance and oversight of their AI usage.

UK businesses are substantially increasing their investment in artificial intelligence. SAP data shows the average UK business now spends £20.6 million annually on AI, a 27% rise from £16.2 million in 2025, with further growth anticipated to nearly £30 million by 2028. Returns on investment are also expected to climb from 17% in 2025 to 22% in 2026 and 39% by 2028.

Despite rising investment, businesses lack the governance structures to manage it effectively. SAP found that only 11% of UK businesses have a holistic, strategic approach to AI, with most treating it on a department-by-department basis. Research by Pax8 reveals deeper problems: a quarter of small businesses discovered unauthorised AI tools running within them over six months, and two in five experienced unexpectedly high AI bills due to poor visibility of spending. Only 23% of UK businesses have a formal review process for internally built AI, compared with 32% in Germany and 36% in the US.

Business leaders remain optimistic about AI's potential. According to KPMG's 2026 global CEO outlook, 87% of British bosses expect returns on AI investment within three years, and 77% are actively redesigning roles and hiring new AI talent to support human-AI collaboration. However, 81% say ethical considerations around AI are very or mostly challenging, and staff resistance to returning to the office remains a workforce concern.

How it is being reported

• Law firms’ billing model faces disruption as clients turn to AI DIY adviceLaw firms are facing a new challenge as corporate clients are increasingly using their own in-house legal teams and AI tools to do legal work themselves, threatening the traditional growth and revenue model. According to new research from HSBC in their yearly UK Law Firm Strategy and Investment Survey, almost three-quarters of 100 law firms [...]City AM · 15 Oct, 06:00
• British firms reshape workforce for AI amid staff resistance to office returnTop bosses at British businesses have said lingering resistance to returning to the office remains a challenge, as City firms focus on redesigning roles to support human-AI collaboration. According to KPMG’s 2026 global CEO outlook, investment in AI remains a top priority for global business leaders, as most British bosses (87 per cent) expect to [...]City AM · 15 Oct, 05:00
• Most small businesses aren't reviewing their own AI usage properlyBritish SMBs are struggling for AI visibility, and that extends to both who's using what and how much it's costing them.TechRadar · 14 Oct, 11:30
• UK firms are spending more on AI than ever before, but still think data is holding them backAI spend is rising, and so are returns on investment, but there are still some core elements holding businesses back.TechRadar · 14 Oct, 10:29

In this story: SAP · Pax8 · KPMG · UK · Germany · US · Sweden

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