The share of UK businesses using at least one artificial-intelligence technology doubled to 32% in 2026 from 16% in 2025, according to the government’s second annual AI Adoption Survey. The results suggest rapid diffusion of accessible tools, but a slower shift in business models and investment.
The research is based on telephone interviews with 3,503 businesses between January and April 2026, followed by 50 in-depth interviews and seven site visits. As a survey, it records what businesses report rather than independently measuring every productivity claim.
Where is business AI adoption highest?
Use remains uneven. The survey reports adoption among 52% of larger firms, compared with lower rates among smaller businesses. Information and communication recorded 61%, real estate 45%, and business services and administration 39%.
Natural-language processing and text generation dominate. Among businesses using or planning to use AI, 77% referred to large-language-model approaches. Administration was the most common function at 81%, followed by marketing at 71% and IT at 66%.
Is AI raising productivity?
Seventy-one per cent of adopters reported workforce-productivity improvements, while half said overall productivity had increased. The report characterises many gains as modest and connected to automation or workflow improvements rather than wholesale transformation.
Financial effects were mixed. Twenty-four per cent reported lower operating costs, 64% no immediate change and 9% an increase. Nearly half of businesses able to estimate spending reported no AI expenditure in 2025, reflecting free tools and features bundled into existing software.
What is stopping deeper use?
Skills, expertise and knowledge remain prominent barriers. They affected 67% of adopters and 78% of businesses planning adoption. Concerns about accuracy and bias were reported by 56% of adopters and 60% of planned adopters. Among non-adopters, 65% cited the absence of a clear business case or proven return.
Human oversight remains common: 81% said people had some input into AI-generated outputs. That finding fits a market where AI is mostly supporting routine work rather than replacing judgement in high-stakes decisions.
Source: UK AI Adoption Survey 2026 executive summary, published 29 October 2026.
Image: Steve A Johnson via Unsplash.