Three months into 2025, the world of artificial intelligence (AI) has already been buzzing with activity. The Trump administration kicked things off with a hefty $500 billion investment in AI, while China’s DeepSeek made headlines with a budget-friendly generative AI model that caught everyone off guard.
At the recent AI Summit in Paris, the UK and Europe found themselves at odds over regulation. In the midst of this uncertainty, it’s easy to overlook the UK government’s AI Action Plan, which Keir Starmer unveiled back in January. This plan lays out 50 concrete measures to turn the UK into a magnet for AI companies, backed by over £14 billion in funding. The goal? To establish the UK as a global frontrunner in AI.
The potential benefits are huge. The International Monetary Fund suggests that embracing AI could lift UK productivity by up to 1.5 percentage points yearly, potentially adding up to £47 billion to the economy over the next decade. But here’s the catch—time is of the essence. We must effectively weave AI into our infrastructure and businesses. The AI market is projected to exceed $1 trillion by 2030, with AI integral to all organizations. However, the decision to postpone the UK’s AI Bill by six months, waiting on the new US administration, is a missed opportunity.
Businesses thrive on stability, and delays in legislation can shake confidence just when it’s needed most. The UK can’t just make grand commitments; it needs solid, actionable plans.
The concerns surrounding the UK’s AI Action Plan are real. Companies in sectors like manufacturing, healthcare, and finance are already leveraging AI, but many others lag behind. Currently, fewer than 30% of workers are using AI in their jobs. To stay competitive, UK businesses have to adopt AI as a core tool for success.
The risk of an AI divide looms large—big businesses could harness AI’s potential while smaller firms may struggle to keep up. To prevent this, we need to invest in skills training, encourage collaboration between public and private sectors, and craft AI-friendly policies. Close integration of cutting-edge technologies like AI into key industries will drive long-term growth.
At Here East, we’re engaging with leaders in AI to explore how the UK can leverage its tech strengths for economic growth. This dialogue is critical to shaping national AI policy.
The government’s decision to delay AI regulation stems from a desire to align with the US. However, this could foster uncertainty at home. While international cooperation is vital, the UK must also establish clear domestic regulations to retain its competitive edge. Companies need confidence in the regulatory environment to invest and innovate.
AI adoption must prioritize sustainability and ethics. We need robust frameworks that respect creativity, protect privacy, and foster trust. Ongoing debates, like those surrounding AI and copyright issues, don’t help resolve these concerns. The UK has a chance to lead in responsible AI adoption, balancing innovation with necessary safeguards.
Economic forecasts further underline the need for urgency. With AI’s potential to drive productivity gains, a lack of clear regulatory guidelines could hinder these benefits. The UK must ensure regulations nurture growth, allowing businesses to flourish while meeting ethical standards.
AI presents a unique opportunity to embed itself in key industries, driving a fundamental shift in productivity. Yet, recent UK productivity figures reveal a worrying trend—only three out of 18 sectors saw improvements, while major areas like retail, energy, and healthcare suffered declines of over 4%. British productivity lags behind other advanced economies, turning a long-standing issue into a pressing crisis. Without action, this could stifle broader economic growth.
To combat these challenges, the UK needs to invest in education, workforce development, and AI-driven productivity solutions. Reskilling workers will be essential to navigate the changes that AI brings.
AI won’t fix productivity problems overnight. Businesses need clear incentives and guidance for successful AI integration. For instance, automated tools like CV screening won’t matter if they don’t lead to real productivity improvements. Without decisive action, the UK risks widening the gap where only well-resourced firms benefit from AI, leaving smaller businesses behind.
The UK must shift focus from merely keeping pace with investments from the US and China to taking the lead in AI adoption. Instead of chasing costly AI projects, it should leverage its strengths in research, a vibrant startup scene, and a legacy of innovation.
The government has made encouraging moves in these turbulent times for AI. If it wants to position the UK as an AI powerhouse, it needs to act quickly. The opportunity is there, but it won’t last forever.