Enthusiasm for GenAI remains high but showing signs of decline in the board and C-suite

Over the last twelve months we have seen a gradual maturation of the views of executives towards Generative AI (GenAI) in the UK. Enthusiasm and excitement remain high with respondents reporting that 61 per cent of C-suite members have a high or very high level of interest in GenAI. While a significant majority of the C-suite in the UK are still highly focused on GenAI, interest has waned somewhat since the peak of 74 per cent in wave 2 in February 2024. The perceived interest of the board follows a similar pattern and has fallen from 59 per cent in wave 1 in November 2023 to 48 per cent in wave 4. This perceived fall interest of executives in the UK mirrors a pattern seen in the global sample.

The trend for declining enthusiasm in the board and C-suite is corroborated by the evidence that there is a small but growing portion of executives who feel like their organisation is now paying too much attention to GenAI (17.5% wave 4 vs 4.5% wave 1). Conversely, the perception of organisations paying too little attention has declined from 23.5 per cent to 12.5 per cent over the same period. The data shows that while the C-suite still believe in the promise of GenAI, they may now be slightly more cautious in their optimism as the initial hype starts to fade. This change in sentiment is typical of the hype-cycle of when new transformative technologies come to the fore. It is often the case that enthusiasm subsides somewhat, when leaders start to face the challenges of adoption to create real business value.¹

Interestingly, technical leaders’ perceived level of interest remains at very high at 86 per cent – unchanged from the first wave. As the initial enthusiasm declines, it may become the role of technical leaders to ensure that the C-suite retain focus on the benefits that the technology can bring despite difficulties that come with implementation. For many technical leaders, GenAI will be their priority deliverable for the next 12 – 18 months. This means a laser focus on ensuring they can demonstrate Return on Investment (ROI) on the substantial investments which their organisations have made. Continued investment in GenAI will rely on technical leaders convincing the Chief Technical Officer (CTO), and others on the C-suite that these investments will pay off.

Employees in the UK are perceived to be becoming more interested in the technology, with 54 per cent now thought to display a high level of interest, up 13 percentage points from wave 1. It is possible that over the course of the year, interacting with GenAI in the workplace has allowed employees to see some of the possible ways in which GenAI can have a positive impact on the work which they do. Another explanation for the increase in employee enthusiasm is their experience of GenAI outside of the workplace. For many, GenAI has been integrated into their everyday life already. Expectations set from using GenAI outside the workplace – as a productivity tool, creativity booster and personal assistant – may bleed into employees’ perception of how it can be beneficial to them at work.

UK leads on upskilling generative AI talent for the future

As employees’ interest in GenAI grows, so too does the impetus to provide education on the technology. Over the last twelve months, there has been an increasing focus on training GenAI-specific talent, with 43 per cent of organisations now putting in a high or very high level of effort into reskilling employees (vs 30% wave 1). Moreover, 51 per cent of organisations are educating the broader workforce on generative AI fluency compared to 32 per cent in wave 1. This figure places the UK as a leader on GenAI education, as they are 8 percentage points more likely than the global average to be educating their workforce on GenAI fluency.

Interestingly, the proportion of organisations recruiting and hiring GenAI staff has declined from 37 per cent to 27 per cent over the same period. Organisations in the UK are six percentage points less likely that their global counterparts to looking to hire GenAI talent, and simultaneously more likely to trying to cultivate that talent internally. The intense competition to find GenAI talent alongside the often-prohibitive cost, are likely key drivers for organisations in the UK pivoting their talent strategy to focus on retraining, rather than hiring where possible. Reskilling and educating the broader workforce shows organisations taking a positive strategic step to building a more agile, future-ready workforce.

Will increasing investment spark large scale adoption? 

Despite some executives recalibrating their expectations of GenAI, the investment outlook remains largely positive for now. Of those surveyed in the UK, 81 per cent expect increased AI investment in the next fiscal year, with 31 per cent expecting growth of over 20 per cent. Additionally, 69 per cent of organisations are now dedicating 20 per cent or more of their total AI budget to GenAI – up 16 percentage points from wave one. Given the time it takes to scope, approve and deploy IT budgets, changing C-suite attitudes towards GenAI could be a leading indicator of future investment decisions – the dampening of enthusiasm could be interpreted as warning signal for investment appetite further down the line.

Despite rising investment, at scale implementation of GenAI is still rare. Most organisations will transform at the speed of organisations, rather than at the speed of technology.² At scale implementation remains low for functions such as Finance (3%), HR (1%), Legal, risk and compliance (2%), and Supply chain (4%), showing no meaningful increase over the last twelve months. For many organisations, these barriers to scaling are expected to be tricky to circumnavigate, with 56 per cent of leaders asserting that it will take their organisation over a year to adequately address this challenge. For functions which are highly regulated like Legal, HR and Finance, organisations are likely particularly cautious about potential regulatory, data, and ethical risks. This hesitancy is understandable, especially in light of the inherent challenge of ‘hallucination’ in GenAI, where the technology generates plausible but potentially inaccurate outputs. Until these risks can be quantified and mitigated, the wider adoption of GenAI in these areas will likely be hindered by the potential for fines, legal repercussions, and reputational damage. A more measured approach might involve integrating elements of GenAI into existing, reliable AI tools to enhance their capabilities safely.

The exception to the trend is in IT / cybersecurity where at scale deployment of GenAI has risen from 18 per cent in wave 1 to 26 per cent in wave 4. Use of AI within IT is common, with many organisations deploying tools which continuously monitor their digital infrastructure.³ Given the extent of existing AI usage in IT, this function is likely best placed to adopt GenAI. In this case, the GenAI often acts to augment existing AI systems – boosting effectiveness – rather than replacing existing systems in totality.

Organisations across UK and globally face complex barriers to implementation 

There are several factors which have contributed to widespread enthusiasm not yet manifesting as large-scale implementation in UK organisations. While GenAI is already a feature of many consumers’ day-to-day lives – be it interactions with virtual assistants, enjoying generated film recommendations, or querying Large Language Models (LLMs) – it is significantly more complex for organisations to embed the technology into their processes. The pace at which technology advances is faster than policy makers and most organisations can be reasonably expected to keep up.

Complying with regulations is now the most pressing risks for executives, and concern has increased slightly over the course of the year (38% in wave 1 vs 41% in wave 4). Regulatory uncertainty leaves organisations with the difficult question of which use-cases will be permissible down the line, making investment decisions more complex. Risks related to speed of adoption causing unanticipated consequences has also grown (22% in wave 1 vs 26% in wave 4). It is plausible that the perception of the risk of unanticipated consequences may grow further if they are well publicised incidents of failure within the GenAI landscape in the UK or globally.

Despite the obstacles, there are reasons for optimism looking forward. Overall, executives report that they are less fearful of most risks related to implementation of GenAI than they were in the first wave. Perception of the risk of intellectual property issues (39% in wave 1 vs 20% in wave 4) and lack of confidence in results (36% in wave 1 vs 22% in wave 4) have seen the biggest decline in perceived risk. The shift in perspective of the different risks may reflect increase in maturity. Leaders may have found that with proper governance, risks related to accuracy (for example, hallucinations) and IP, can often be mitigated with proper governance structures. This can involve practical steps like more standardised prompt engineering and rigorous verification of GenAI outputs by trained humans. By implementing such filters between raw GenAI output and its dissemination to customers, stakeholders, or clients, firms can leverage the benefits of this technology while mitigating some of the potential risks.

In contrast, regulatory risks and unintended consequences are harder to control, and come to the fore as organisations get closer to fully implementing the technology. Those that have no concerns about the risks of GenAI remains low at 2 per cent – illustrating that almost all are cognisant that the implementation of GenAI does come with potential hazards to be avoided. 

Business leaders in the UK feel increasingly ready to embrace GenAI

An encouraging finding from the research is the growing confidence regarding preparedness for GenAI adoption. Organisations in the UK now feel more ready to adopt GenAI tools, with a marked increase in preparedness across a range of domains, including Strategy (22% in wave 1 vs 45% in wave 4), Talent (11% in wave 1 vs 28% in wave 4) and Technology infrastructure (25% in wave 1 vs 45 % in wave 4). Despite the uptick in preparedness, it is important to note that the majority of organisations still remain unprepared.

There is some regional variation in the level of preparedness reported by organisations. Organisations in the UK are six percentage points more likely than the global average to feel prepared from strategy and talent perspectives. The differential in talent preparedness may reflect that UK organisations report that they are already more likely to be training and educating the broader workforce on GenAI fluency than their global counterparts.

Conversely, UK organisations report that they are six percentage points less ready from a risk and governance perspective. This again reflects what UK organisations are now most likely to say is their biggest barrier to GenAI implementation – complying with regulations.

There are likely a number of factors which have contributed increasing confidence felt by executives regarding adopting GenAI. Over the course of the last twelve months, organisations have had time to get to grips with GenAI capabilities and how it might be applied to use cases within their business. With experience comes expertise, and the proportion of respondents expressing high confidence in their organisation's GenAI expertise has surged from 37 per cent in wave 1 to 52 per cent in wave 4. Moreover, organisations are increasingly developing governance frameworks to help mitigate some of the risks associated with GenAI, ensuring responsible and ethical implementation. When risks are understood and plans are in place to mitigate them, executives likely become more confident in adopting the technology.

When can organisations expect to see their investment in GenAI to pay off?

The payback from investments in GenAI is not immediate, 70 per cent of organisations predict it will take over twelve months to achieve expected ROI on their priority GenAI initiatives. However, when it comes to organisations most advanced implementation of GenAI, 74 per cent feel that the ROI generated has already met or exceeded expectations. The positive performance of leading GenAI initiatives has likely contributed to organisations willingness to invest further and spend time getting other GenAI applications right. Of the organisations surveyed, 78 per cent report they are willing to endure at least twelve months of ROI targets not being met before pulling back on investment. This is indicative of leaders’ readiness to show patience in order to unlock the potential rewards that GenAI can bring to their organisations.⁴

Key takeaways