Artifical Intelligence (AI)
The Impact of AI on UK Businesses in 2025
As we step into 2025, the future landscape for UK businesses is being profoundly reshaped by rapid advancements in AI.
From automating routine tasks to providing deep insights through data analysis, AI is no longer a futuristic concept but a present-day reality. We have passed the point where it can be considered a ‘flash in the pan’. AI is delivering demonstrable change across a range of industries and is unquestionably here to stay.
This transformation brings a myriad of both opportunities and challenges, with huge differences between different sectors of the economy. In the interests of brevity, this piece looks to deliver a high-level summary of the current legal position, before refocusing on some concrete deliverable actions applicable to any business.
Legal Position
In short, the Government’s position on AI regulation in the UK remains opaque. However, we anticipate increasing pressure on the UK to ‘pick a lane’ between the approaches being taken by the EU and the US.
The EU approach would involve intensifying regulatory efforts to align with our geographically closest market. The EU AI Act is set to come into force incrementally across the year, imposing significant new burdens and risks on those looking to develop or sell AI products into the EU. The EU is certainly anticipating a similar ‘Brussels effect’ to that seen after GDPR came into force, where the regulation was rapidly adopted as the gold standard in various other territories around the world.
By contrast, over in the US, we expect an increasingly liberalised regulatory landscape. The incoming president is closely advised by some of the most powerful figures in the AI sphere, most seeking to cement the US’ position as the market leader. By contrast to the liberal legal approach on their home soil, we expect a continuation of the tax and export controls leveraged by the previous administration to help control the global supply of the powerful computer chips required to train and deploy the latest AI models.
Some prominent AI models developed in the US, with scant regard for the EU’s existing regulatory framework around privacy and automated decision-making. They have already proven difficult for EU regulators to police or curtail. There is likely to be considerable pressure on the Government not to stifle its own homegrown innovation by overregulating, particularly where the success of the digital economy is central to the Government’s plans for growth.
Where does this leave those actually developing or deploying AI? We continue to recommend adopting a ‘best practice’ approach to the development and use of this technology, showing proper consideration for:
- the impacts on privacy;
- wider societal and environmental impacts; and
- the risk of misuse.
Even if not demonstrating proper concern for such issues is likely to be important as customers, workforces, and other stakeholders become more concerned about the risks of AI usage. If developing tools to be sold into the EU market, a more stringent set of obligations will need to be adhered to, regardless of the domestic regulatory landscape.
Practical Steps for Every Business
Every business will be somewhere different in their AI journey, from early adopters to those just starting out. A comprehensive list of actions which you could take is beyond the scope of this article.
However, set out below are a few foundational steps which are useful whether you are making your first foray into AI, or reviewing how far you have already come.
The EU AI Act mandates AI literacy for staff using certain AI systems, emphasising the need for regular training and policies to ensure compliance and effective use of AI technologies. Even if you are not subject to the Act itself, that is still a good idea.
Consider:
- implementing a program on AI technical skills and awareness; and
- appointing AI champions responsible for their team, or the business’, approach to AI.
AI policies will soon be ubiquitous. These should cover key issues such as:
- whether AI can be used in the workplace;
- if so, which applications are allowed;
- the permitted uses of those applications; and
- how such use will be monitored.
Such policies are worthwhile even when a business has not formally adopted any AI tools. Many studies have shown that a considerable number of employees are secretly making use of publicly available AI tools such as ChatGPT in their day-to-day work. These public tools lack the security guarantees you would expect from a corporate deployment of AI, making this ‘shadow’ use of unapproved AI a significant risk.
Consider:
- drafting or reviewing your existing AI policy;
- communicating it out to your employees; and
- ensuring that communication of the policy is part of your onboarding process for new joiners.
The rate at which AI has been developed in recent years means that T&Cs that were drafted even just a few years ago may not adequately address the complexities now being introduced by the technology.
Consider:
- reviewing your T&Cs of sale, to ensure that they reflect any AI which you have incorporated into your offering; and
- reviewing your purchasing T&Cs, to ensure that your position is clear in terms of whether, or to what extent, you are happy for your suppliers to utilise AI when providing you with goods and services.
Already a growing issue in recent years, this has been supercharged by AI. Many of the tools which can enhance your day-to-day productivity can also be used to enhance and even automate phishing, social engineering and hacking efforts. As before, this is not only an issue for IT and Infosec teams, but ties back into the AI literacy and training mentioned above. Employees can’t protect themselves from attacks they aren’t aware are possible.
Consider:
- whether your IT / Infosec team has the resources it needs to consider and address AI threats; and
- updating any existing cybersecurity training in light of new threats presented by AI.
The integration of AI into UK businesses presents both exciting opportunities and complex challenges. As we move forward, staying informed and adaptable will be key to thriving in the new AI-driven era.
Will Richmond-Coggan
Partner
The Government’s AI opportunities action plan
The UK has recently published its AI Opportunities Action Plan.
This comprehensive plan aims to position the UK as a global leader in artificial intelligence (AI) by fostering innovation, enhancing public services, and driving economic growth.
In total, the plan includes 50 recommendations, and bears a full review by anyone operating their business within this space. This article sets out our initial impressions of this important new statement of intent, which we will continue to review as the Government rolls out the strategy in earnest.
Overview
The plan outlines a strategic framework to harness the potential of AI across various sectors. It is structured around three core objectives:
- Laying the Foundations to Enable AI: This involves building a robust AI infrastructure, including data centres, high-performance computing, and access to quality data (including the development of a ‘National Data Library’).
- Changing Lives by Embracing AI: The plan emphasizes the adoption of AI in public services to improve efficiency and outcomes. This includes using AI for healthcare diagnostics, education, and public safety.
- Securing Our Future with Homegrown AI: The Government aims to foster a thriving domestic AI ecosystem by supporting AI research and development, attracting top talent, and ensuring the UK remains at the forefront of AI innovation. This includes establishing a ‘UK Sovereign AI’ unit to partner with the private sector and drive the development of frontier AI capabilities.
Government Support for UK Businesses
To this end, the plan includes several initiatives designed to support UK businesses in developing and integrating AI within their operations:
- AI Growth Zones: The Government plans to establish AI Growth Zones across the UK, to help provide businesses with access to state-of-the-art AI infrastructure, including data centers and high-performance computing facilities.
- Funding and Grants: The Government will provide funding and grants to businesses investing in AI research and development which are identified as offering promising pilot technologies.
- Skills and Training Programs: Recognizing the importance of a skilled workforce, the Government will invest in AI education and training programs. These initiatives will help businesses upskill their employees, ensuring they have the necessary expertise to implement and manage AI technologies effectively.
- Public-Private Partnerships: The Government will promote collaboration between the public and private sectors through initiatives such as the ‘UK Sovereign AI’ unit. These partnerships will facilitate knowledge sharing, drive AI research, and accelerate the development of cutting-edge AI technologies.
Closing Comments
The proof of the pudding is very much in the eating, and the true impact of this plan will depend on how well it is implemented in practice. The scale of the challenge, in terms of positioning the UK to lead globally, has recently been brought into focus by the announcement of the USA’s $500bn Stargate AI investment project.
Even so, the Government’s focus on stimulating growth and innovation gives significant cause for optimism in this space. The emphasis on the need to foster talent, develop compute and facilitate access to quality data, in particular the enhanced plans for a ‘National Data Library’, should be welcomed. This shows that the Government recognises that the opportunity of AI rests on establishing solid foundations, not simply adopting the latest models. All in all, a promising statement of intent, now let’s see it in action.
Legislation
AI and the Data (Use and Access) Bill
For more information on this topic, please see our article in the Data Protection section here →
News
Possible data mining exception for AI training using copyright works
For more information on this topic, please see our article in the IP & Media section here →
Case law
To read about the latest case law developments in the AI space, please see the following articles in our IP & Media section below:
- Getty Images v Stability AI →
- UKIPO v Emotional Perception – appeal to Supreme Court →
Key contact
Will Richmond-Coggan
Partner
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