New UK Government research reveals that Wales accounts for just 1.6% of the UK's artificial intelligence businesses, despite the sector generating £33.6 billion in revenues and employing more than 130,000 people across the country.
The Artificial Intelligence Sector Study 2025, published last week, identifies 10,488 AI businesses across the UK. Wales's share of these businesses is lower than Scotland (3.7%), the North West of England (5.9%) and the West Midlands (4%), with only Northern Ireland and the North East of England having smaller shares.
Writing in a column for WalesOnline, Professor Dylan Jones-Evans argues that Wales has failed to capitalise on the opportunity presented by generative AI, which began with the launch of ChatGPT in November 2022.
Wales's response to the AI opportunity
Jones-Evans notes that Wales has talented researchers, established universities and specialist expertise in areas such as semiconductors, cybersecurity and financial technology. He argues that 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.
He says Wales could have responded in early 2023 by establishing a national programme to identify, develop and invest in hundreds of new AI businesses, bringing together universities, entrepreneurs, experienced investors and economic development agencies. Such a programme could have concentrated on sectors where Wales already possessed specialist expertise, including healthcare, manufacturing, education and financial services.
Instead, the Welsh Government published its AI Plan in November 2025, almost three years after ChatGPT first appeared. Earlier this year, it announced £2.1m to support AI adoption, including £600,000 for Business Wales, £1 million for skills development and £500,000 for tourism and events.
Focus on adoption rather than creation
Jones-Evans says these initiatives largely focus on helping existing companies use AI rather than creating businesses that develop and commercialise the technology. He argues that 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.
He also questions how many entirely new AI ventures have been established with Business Wales support, noting that typing "AI" on its website directs users to a series of webinars to help firms use AI rather than a dedicated programme to create new AI businesses.
Role of the Development Bank of Wales
Jones-Evans says the Development Bank of Wales should have a particularly important role in this process. He notes that 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 that recognises both their growth potential and the commercial risks involved.
He argues that rather than focusing exclusively on individual investment decisions, the Bank should work with universities, experienced entrepreneurs and private investors to establish a coordinated pipeline of new AI companies that can be supported from their earliest stages through to international expansion.
Jones-Evans concludes that the revolution is far from over, and 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. He says 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.
