AI Adoption in UK Businesses: What the Data Shows

How many UK businesses are using AI?

Around 35% of UK businesses with 10 or more employees reported using at least one AI technology in June 2026, up from around 12% in late 2023, with adoption varying sharply by business size and sector according to the ONS Business Insights and Conditions Survey.

By size, 28% of businesses with 0 to 9 employees reported AI use, compared with 49% of those with 250 or more employees. By sector, close to three-fifths of information and communication businesses (58%) reported using AI, against 13% in construction.

Separate international comparisons cited in the same ONS release, drawn from a Federal Reserve Bank of St. Louis study, put UK worker-level AI use at around 36%, higher than France, Germany and Italy but below the United States, where 43% of workers reported using generative AI for their job in early 2026. A different measurement approach, based on a National Bureau of Economic Research survey of senior executives, found much higher firm-level adoption: 71% of UK firms and 78% of US firms reported using at least one AI technology, illustrating how differently adoption can be measured depending on whether the question is put to individual workers or to firm leadership.

What are businesses using AI for?

Improving business operations is the most commonly reported use of AI, cited by close to 60% of businesses across all size bands, while more transformative uses such as developing new products or exploring new markets are reported far less often.

Personalising products or services is the second most common use overall, and is more prevalent among smaller businesses, with around 31% of businesses with 0 to 9 employees reporting this use. Free-to-use software is the most common adoption route in sectors such as manufacturing, retail and hospitality, while construction, information and communication, and professional and scientific businesses lean more toward purchased external software or ready-to-use services.

Is AI reducing jobs in UK businesses?

Most businesses using AI report no change to overall workforce headcount so far, with around half across most size bands reporting no impact, and only a small minority reporting reductions.

Among medium-sized businesses, just under 7% reported a headcount decrease, a slightly higher share than among small businesses. Businesses that use AI specifically to improve operations are somewhat more likely to report a reduction: 6% reported decreased headcount against this use case, compared with 63% reporting no change and 1% reporting an increase. The Bank of England's Decision Maker Panel, cited in the same ONS release, similarly found that for most firms AI has had no material impact on employee numbers over the past three years.

What's stopping businesses from adopting AI?

Around 41% of UK businesses with 10 or more employees reported no barriers to AI adoption in the three months to June 2026, while among those reporting challenges, a lack of expertise and cost were the most cited constraints.

A lack of expertise was most evident among businesses with 100 to 249 employees, around 18% of which cited insufficient expertise as a barrier, while cost affected a consistent 7% to 14% of businesses across size bands. Businesses citing a lack of expertise were markedly more likely to respond by training or retraining existing staff: around 62% did so, compared with around 26% of businesses reporting no barriers, suggesting internal upskilling is the primary response to capability gaps rather than external recruitment, which remained comparatively uncommon across all size bands.