UK firms to bolster AI spending despite ROI concerns

New research from NetApp and YouGov indicates widespread plans amongst UK IT decision makers to increase investiture in artificial intelligence (AI) during 2024, despite uncertainties surrounding its return on investment (ROI). With the findings suggesting a lack of preparedness for AI adoption, concerns have been raised about businesses potentially rushing to invest before they are ready.

Key statistics in the research reveal that 59% of IT decision makers intend to inject more capital into AI this year versus 2023. However, confidence in the return of these investments is lacking, with only a third of businesses having confidence in their AI investment projects and nearly half (42%) of small and medium-sized enterprise (SME) IT decision makers unsure about whether their current use of AI would yield ROI. Indicatively, only 20% of businesses exhibited a well-founded understanding of AI application.

Despite this, the majority of IT leaders, around 67%, agree on the strategic importance of AI to their future operational success. This perhaps sheds light on why 59% of decision makers plan to increase investment in AI this summer. Moreover, 26% are either actively exploring AI technology or planning to adopt it for the first time this year. Piero Gallucci, Vice President & General Manager, UK & Ireland, said, "It's clear many companies are running before they can walk in order to remain competitive. While our industry often boasts a fail-fast culture, businesses need to approach AI more strategically. Poor decisions made now could have lasting consequences to long term effectiveness."

According to the research, 33% of UK businesses have already adopted AI tools, primarily to maintain a competitive edge. Kirsty Biddiscombe, UK Head for Artificial Intelligence, Machine Learning and Analytics at NetApp UK, suggests that rather than focusing on the cutting-edge of AI technology, businesses need to "prioritise improvements to build an intelligent data infrastructure." She argued that the key to remaining competitive with AI is building a robust data pipeline to feed it.

Sue Daley, Director for Tech and Innovation at TechUK, equally emphasised the need for a strategic approach to AI adoption. Daley warned, "A one-size-fits-all approach to putting AI into action is not sufficient. Instead, a varied approach is required to ensure that organisations are well-prepared to maximise the benefits of AI adoption. Those that fail to do so may miss out."

The research also indicated that UK businesses with an annual turnover of £10 million or higher may be leading the AI adoption charge, with 26% of such organisations already having adopted "off the shelf" AI tools. Additionally, 37% of businesses surveyed utilise third-party AI functionality, either with the data sets provided or enriched with their company's data.

The varied use of AI amongst IT decision makers is reflected in the wide range of applications mentioned in the research. These include computer vision, natural language processing, large language models, digital twins, and virtual reality simulations; further indicating the broad influence and importance of AI technologies within the UK business landscape.