UK Firms Lag in AI Readiness, Cisco Warns
Britain faces a critical moment in its effort to harness artificial intelligence for economic growth, but new research from Cisco reveals most UK companies are ill-prepared to deploy AI securely and effectively at scale.
According to Cisco’s AI Readiness Index, only 16 per cent of UK firms are equipped to integrate AI across operations without risking security or efficiency. Sarah Walker, Cisco’s UK chief executive, described the issue as “AI infrastructure debt” – the cumulative impact of outdated systems, fragmented data and security gaps that hinder progress and inflate costs. “AI’s value is much harder to unlock” without a strong infrastructure foundation, said Walker.
The report highlights a divide between high-performing ‘pacesetters’ and the broader business community. These pacesetters, representing about one in six AI adopters, treat AI as a strategic priority, with modern systems and sustained investment. Ninety per cent report gains in profitability, productivity and innovation, compared with a 68 per cent average across UK firms. Nearly three-quarters have flexible networks that support AI scaling, in contrast to 22 per cent of other companies.
However, major hurdles remain. More than 60 per cent of UK firms struggle to centralise data, and only 28 per cent have sufficient GPU capacity to run advanced AI models. With AI workloads set to grow rapidly, these limitations could stifle productivity gains and slow the country’s digital transformation.
The problem extends to strategy. A parallel report by Forvis Mazars shows a disconnect between confidence and capability in the financial sector: while all surveyed C-suite executives claim to be “AI-ready,” fewer than half have a clear strategy. Just 31 per cent have set defined objectives, and only a quarter prioritise data improvements.
Cybersecurity is also a growing concern. Following recent attacks on UK retailers including M&S and Harrods, Cisco’s cybersecurity index shows just 4 per cent of firms are fully prepared to face advanced threats. “Far too many organisations are sitting ducks,” said Martin Lee, EMEA lead at Cisco Talos.
Skills shortages add to the challenge. Thirty-five per cent of UK businesses cite lack of expertise as the biggest barrier to AI adoption, while financial uncertainty also plays a role. In London, where 67 per cent of businesses already use AI – compared with a national average of 52 per cent – concerns persist about the availability of digital talent. Alison Kay of AWS warned this could limit broader benefits.
These issues raise concerns about the UK’s role in the global tech economy. The House of Lords Communications and Digital Committee has warned that without stronger support for scaling UK-based AI companies, the country risks becoming an “incubator economy” – fostering innovation but unable to retain it. Labour’s Industrial Strategy promises investment in sovereign AI units and growth zones, yet questions remain over whether this will be enough. Ongoing reliance on foreign cloud providers and weak infrastructure pose continued risks to long-term AI development.
Still, there are reasons for optimism. Walker believes the UK has the talent and ecosystem needed to lead in AI, provided firms invest in robust systems, strategic planning and governance. “The best outcomes come from leaders who set clear goals, back what works, and stop what doesn’t,” she said.
With the right infrastructure, skills and security in place, the UK can move from early-stage experimentation to large-scale AI deployment, unlocking productivity and public service gains and reinforcing its place in the global innovation landscape.
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