Since the publication of the inaugural AI Sector Study in 2022, the UK’s AI ecosystem has grown to include more than 5,800 companies – an 85% increase over the past two years.
AI revenue is now £23.9 billion, and the sector employs more than 86,000 people.[1] To put that in context, it’s bigger than the UK gambling sector – on both counts.
Digital infrastructure is the foundation of this new economy. As we head into 2026, talk of data centres and network capacity dominates boardroom meetings.
Unveiling the Cybersecurity and Resilience Bill recently (more of that later), the Department for Science, Innovation and Technology said: “Data centres keep the UK running, from patient records and payments to email services and AI development.”[2]
As a digital infrastructure provider, we recently commissioned research to improve our insight and support for these businesses.
Their responses show that infrastructure has overtaken both skills and headcount as the number one area of focus for increased technology investment for the next two years.
However, it also suggests that AI won’t always be the main force for change behind digital activity in the UK. While 78% of respondents cited AI in the top three drivers, 55% specified sovereignty and residency concerns.
Commercial success used to be based on performance - what a product or solution did and how well it did it. Performance defined value in the market - and between that value, the amount of supply and demand, costs were developed.
Now, we must add that this supply, demand, product or solution are all secure, sustainable and safe, which are the province of regulation.
Compliance with regulation is once again centre stage with the introduction of the Cybersecurity and Resilience Bill before Parliament, following the Data (Use and Access) Act passed earlier this year. These two major pieces of legislation will define tech investment in the UK.
This is of particular importance to digital infrastructure buyers – and our research shows British businesses have already made this connection. More than three quarters of respondents - 78% - said that data sovereignty and residency considerations had increased their organisation’s investment in digital infrastructure over the last two years.
Shifts in buying patterns
The choices these buyers have made have been seismic. In 2021, Barclays found that 43% of enterprises were planning to move workloads from public clouds to on-premise or private cloud infrastructure. By 2024, this grew to 83%.
Our own research identifies that 87% of UK businesses are planning to migrate partially or fully from public cloud.
Of those, 36% plan to use colocation to lead their hybrid approach, 38% their own data centres, and 54% are prioritising private cloud. That’s a remarkably diverse market in which UK businesses will operate.
These figures suggest substantial turbulence within private sector digital infrastructure: the flight to and from public cloud, the undeniable impact of AI and the looming shadow of compliance.
This article is the first in a series of blogs and podcasts that will explore the wider issues identified in Pulsant research, focusing on the impact for buyers and users.
We’ll investigate the challenges businesses face as they seek to connect to infrastructure that can drive growth.
We’ll assess the new demands being made on data centre providers as their facilities form the foundation of an AI-driven, compliant ecosystem.
And we’ll explore the regional and vertical differences that hide critical competitive advantage.
To join the discussion, download the full Pulsant Perspectives report, follow us on LinkedIn and keep an ear out for our podcasts – coming soon.
[1] See Artificial Intelligence sector study 2024 - GOV.UK
[2] See Tough new laws to strengthen the UK's defences against cyber attacks on NHS, transport and energy - GOV.UK