TLDR: Senedd Research has published an article exploring the profound implications of artificial intelligence technologies for Wales’s economy, businesses, and workforce. The analysis highlights a significant increase in AI companies within Wales, alongside government initiatives to foster AI adoption, address skill gaps, and establish AI infrastructure, ahead of a key Plenary debate on the Economy, Trade and Rural Affairs Committee’s report.
Senedd Research has released a comprehensive article delving into the potential impact of artificial intelligence (AI) technologies on the Welsh economy, its businesses, and its workers. This timely analysis precedes a Plenary debate scheduled for September 24th on the Economy, Trade and Rural Affairs (ETRA) Committee’s report concerning AI and the economy.
The research underscores the rapid acceleration of AI development, particularly with the emergence of generative AI chatbots. The First Minister has expressed optimism, stating, “There can be enormous benefits to the economy in establishing the tech and wider infrastructure here in Wales.”
Data indicates a burgeoning AI sector in Wales; recent UK Government research reveals that the number of AI companies in Wales doubled between 2022 and 2024. However, Wales currently accounts for only 1.4% of registered AI company office locations across the UK. Broader adoption of AI by businesses is also on the rise, with the Office for National Statistics reporting that 21% of UK businesses were utilizing AI technologies in June 2025, a twofold increase since September 2023. An additional 14% of businesses plan to integrate AI within the next three months.
Despite this growth, challenges persist. A survey conducted last year by the Open University and British Chambers of Commerce found that over half of Welsh businesses lacked confidence in applying new AI technologies. Key barriers to AI adoption, as identified by the UK Government’s Technology Adoption Review, include financial constraints, a shortage of skilled workforce and management, limited awareness of AI’s benefits and risks, policy and regulatory uncertainties, and insufficient access to technological infrastructure. The ETRA Committee has emphasized the critical need for practical support for businesses interested in AI. Professor Rossi Setchi of Cardiff University highlighted this, stating, “what we need is practical help, practical advice.”
In response, the Welsh Government is actively pursuing strategies to bolster AI capabilities. The UK Government is establishing AI growth zones to attract investment in data centres, with the First Minister noting that Wales is “uniquely placed to benefit from the AI infrastructure plans, with work already underway to develop tech hubs, shared resources and data centres.” Wales’s data centre capacity is estimated to be higher than any English region outside London, with further construction planned. A site for an AI growth zone in Wales is expected to be announced by the end of 2025.
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Addressing the skills gap, the First Minister announced plans to offer “Cutting-edge AI and digital skills in every Welsh secondary school” and to develop AI centres of excellence in partnership with others to ensure a just transition for workers. FSB Wales echoed concerns about digital literacy, stating, “there’s an interest in adopting AI tools, but we also know that there’s a high level of poor digital literacy in Wales as well, so looking at how our education institutions can now meet the demand of the economy, meet the demand of our firms is really, really key.” These initiatives aim to equip the Welsh workforce and businesses to harness the transformative potential of AI.
