The UK’s AI ecosystem is both advanced and uneven. The UK ranks third in the Stanford HAI Global AI Power Index1, reflecting world-class research strength, a deep talent base and one of the largest AI markets internationally. According to Oxford Insights’ AI Readiness Index2, the UK sits among the top five nations worldwide for institutional preparedness and public sector capability. Universities remain a magnet for AI talent, producing research that rivals leading US labs.
Politically, the UK occupies a middle ground between the EU’s regulate-first model and the US’s market-first stance. Instead, the UK has adopted a principles-based framework, emphasising accountability, transparency and safety by design. The UK has carved out a leading role in AI safety and ethics, reflected in the Government’s convening of the Bletchley Park AI Safety Summit and the creation of the AI Safety Institute (now AI Security Institute), seen as best in class by many AI developers.
However, this strong research base and safety expertise has not yet been translated into scale with US companies in particular dominating the development of large language models. The UK also trails the US and China in AI adoption rates across industry, compute capacity, and patent generation. Businesses outside the tech sector remain cautious, with AI adoption3 disproportionately concentrated in ICT, telecoms and marketing.
The AI Opportunities Action Plan marked a clear shift from the previous Government’s focus on risk to a strategy rooted in growth and national capability. The economic case is overwhelming. The IMF has estimated that widespread AI adoption could boost UK productivity by up to 1.5% annually, equivalent to around £47 billion in additional output each year. In a country where productivity per worker still trails the G7 average by 16%, AI represents not just a growth opportunity but an essential tool for economic resilience.
The challenge now is execution - acting decisively to turn early advantage into lasting economic impact.
