New UK Government research reveals that Wales accounts for just 1.6% of the UK's artificial intelligence businesses, raising questions about whether the nation has missed its opportunity in the AI revolution.
The Artificial Intelligence Sector Study 2025, published last week, identifies 10,488 AI businesses across the UK, generating £33.6 billion in revenues and employing more than 130,000 people. Wales's 1.6% share compares unfavourably with Scotland's 3.7%, the North West of England's 5.9% and the West Midlands' 4%, with only Northern Ireland and the North East of England having smaller shares.
Missed Opportunity in Generative AI
When ChatGPT was launched in November 2022, it signalled the beginning of one of the most significant technological revolutions in modern economic history. Almost overnight, entrepreneurs had opportunities to establish entirely new businesses, develop innovative products, and compete internationally in markets that barely existed a few years earlier.
For Wales, which has spent decades trying to build a more innovative and entrepreneurial economy, this should have represented an extraordinary opportunity to create a new generation of high-growth businesses. Unlike established industries where competitive advantages have been accumulated over generations, generative AI provided an opportunity for regions to develop new economic strengths relatively quickly.
Wales has talented researchers, established universities and specialist expertise in areas such as semiconductors, cybersecurity and financial technology. AI businesses do not necessarily require expensive factories or extensive physical infrastructure, and small entrepreneurial teams can develop internationally competitive products with relatively modest initial investment.
Slow Government Response
The Welsh Government published its AI Plan in November 2025, almost three years after ChatGPT first appeared. Earlier this year, it announced £2.1 million to support AI adoption, including £600,000 for Business Wales, £1 million for skills development and £500,000 for tourism and events.
These initiatives largely focus on helping existing companies use AI rather than creating businesses that develop and commercialise the technology. Helping a Welsh retailer use AI to improve its marketing or a manufacturer improve productivity is important, but creating a Welsh AI business capable of developing a product for international markets has the potential to generate employment, intellectual property, exports and entrepreneurial wealth on an entirely different scale.
The Development Bank of Wales has supported individual AI businesses, but there is little evidence of a dedicated strategy to build an entire new generation of AI ventures. The UK Government's latest research identifies access to equity investment as one of the principal barriers facing AI companies, with early-stage technology businesses needing patient capital, specialist investors and support.
Need for a Coherent Programme
There is still an opportunity to change course, but that requires the Welsh Government, Business Wales and the Development Bank to establish a coherent and measurable programme for AI entrepreneurship, with clear targets for business creation, investment and employment.
The real gamechanger is not only ensuring Welsh businesses use artificial intelligence, but how many of the businesses creating the technologies of the future will be established, owned and grown here in Wales. Unless Wales demonstrates considerably more ambition, the answer may be disappointingly few.
