Nearly a third of UK SMBs set no AI budget in 2026
New survey findings show that while interest in AI continues to grow, the UK remains more hesitant than its European neighbours. Nearly half of UK SMBs cite costs, time, and trust concerns as the biggest barriers to adopting the technology.
5 May, LONDON
IONOS, the digitalisation partner for small and medium‑sized businesses, has released new survey findings showing that while interest in AI continues to grow, many UK SMBs are still taking a cautious approach to adoption. Cost pressures, limited time and concerns around trust are shaping how and how quickly they choose to invest.
To better understand how digitalisation and AI are supporting business priorities, IONOS partnered with YouGov to survey 1,001 decision‑makers from UK organisations with up to 250 employees.
The findings by IONOS suggest that nearly a third of UK SMBs (29%) say they will allocate no budget at all to AI projects in 2026. Instead, they are directing investments where they expect the most immediate return. Online visibility — from websites to social media and digital marketing — tops the list, with 36% naming it as their key investment priority for the year.
Although nearly two in three SMBs (63%) believe they could remain competitive over the next two years without adopting AI, they’re far from stepping away from it. Planned AI investment is rising, up from 27% in 2025 to 31% in 2026, pushing it ahead of traditional IT security, which has slipped from 33% to 30%.
The UK, however, remains more cautious than its European neighbours. In France, Germany and Spain, between 35% and 36%** of SMBs plan to invest in AI this year, putting them four to five percentage points ahead of the UK.
Costs remain the biggest barrier to digitalisation for UK SMBs, cited by almost half (46%), while 43% say a lack of time is holding them back. Trust is also a major concern. Around half point to worries about data theft or third‑party access (51%) and broader trust issues (46%) as key obstacles to adopting AI, while 49% are unsure about the technology’s reliability.
Even so, the overall sentiment is far from negative. 29% of SMB’s describe themselves as optimistic and 28% curious when it comes to AI. When asked where AI could make the biggest difference, many pointed straight to efficiency gains (49%) and freeing teams from repetitive tasks (39%).
Achim Weiss, CEO IONOS, commented: “SMBs aren’t looking for excuses to avoid artificial intelligence, they are looking for reliable partners. Companies do not want experiments; they want reliable results on an infrastructure they can trust.”
The research also points to a price sensitivity in the UK market. A quarter of UK SMBs say they would only use free AI tools. 24%** would pay up to £43 for AI solutions saving them at least five hours a week. Just 12% are willing to pay between £44 and £87 per month – the pricing band that represents the sweet spot in other European markets, reinforcing just how closely AI adoption is tied to affordability.
The findings paint a picture of a business community that is interested in AI but unwilling to adopt it for its own sake. The priority is to protect the business, focus on the fundamentals, and invest in technology where it can make a meaningful difference.
*The data is based on an online survey conducted by YouGov Deutschland GmbH on behalf of IONOS among approximately 4,000 decision-makers from small and medium-sized enterprises with up to 250 employees in Germany, France, the United Kingdom, Italy and Spain (survey period: January–March 2026). The UK sample included 1,001 respondents.
**Value aggregated from two adjacent scale points.
