Is Wales making the most of the AI revolution

it is reasonable to ask whether the scale and urgency of our response have matched the economic opportunity.

(Image: VCG via Getty Images)

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.

However, almost four years later, new UK Government research suggests that we have failed to capitalise sufficiently on that opportunity.

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. Yet Wales accounts for just 1.6% of these businesses, compared with 3.7% in Scotland, 5.9% in the North West of England and 4% in the West Midlands with only Northern Ireland and the North East of England having smaller shares.

Disappointingly, this data paints a depressing picture of Wales’s position in one of the world’s fastest-growing industries and what makes this particularly frustrating is that, 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.

Of course, London, Oxford and Cambridge already possessed considerable advantages in research, venture capital and technology businesses, but Wales also has talented researchers, established universities and specialist expertise in areas such as semiconductors, cybersecurity and financial technology.

More importantly, 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, opening opportunities for places that have traditionally struggled to attract major industrial investment.

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, what have our economic development institutions actually achieved? 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. These are welcome initiatives, but they largely focus on helping existing companies use AI rather than creating businesses that develop and commercialise the technology.

And that distinction is fundamental as 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.

Both activities matter but they are not interchangeable and if Wales wants to improve its long-term economic performance, it cannot simply become a more efficient consumer of technologies developed elsewhere and must create more of the businesses that develop and own those technologies.

The Development Bank of Wales should have a particularly important role in this process and it has supported individual AI businesses but there is little evidence of a dedicated strategy to build an entire new generation of AI ventures.

This is especially concerning when 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.

Indeed, 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.

Another fundamental question is how many entirely new AI ventures have been established with Business Wales support? How many have attracted external investment, created highly skilled employment or developed products capable of competing internationally? Indeed type in AI on its website and you get directed to a series of webinars to help firms use AI rather than a dedicated programme to cerate new AI businesses.

Given this and almost four years after the generative AI revolution began, it is reasonable to ask whether the scale and urgency of our response have matched the economic opportunity.

For decades, Wales has struggled to overcome the legacy of industrial decline, relatively weak private investment and an economy that creates too few high-growth businesses yet here was an emerging industry offering an opportunity to develop new competitive strengths without many of the traditional disadvantages that have constrained our economic development.

Wales should have been among the first of the UK nations and regions to recognise that opportunity and respond with an ambitious programme focused on creating new businesses, attracting investment and developing internationally competitive technologies. Instead, the evidence suggests we have again be too slow to react to such opportunities and paid insufficient attention to creating the next generation of Welsh AI companies.

Fortunately, the revolution is far from over, and there is still an opportunity to change course but that requires the Welsh Government, Business Wales and Development Bank to establish a coherent and measurable programme for AI entrepreneurship, with clear targets for business creation, investment and employment

In the end, 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 and unless we demonstrate considerably more ambition, the answer may be disappointingly few.