Artificial intelligence tools are changing the global economy and the UK has the opportunity to lead this change.
According to recent data from Microsoft, AI is expected to add around £550bn to UK GDP by 2035, creating new jobs and increasing productivity.
But the UK urgently needs to modernize its IT infrastructure to take advantage of this growth. A recent report by the Tony Blair Institute shows that the UK only controls 3% of the global computing power needed to support an AI-powered economy.
By comparison, the US owns 75% of the world’s artificial intelligence supercomputers. If this imbalance is not addressed, the UK risks falling behind in the AI race.
Government initiatives such as the AI Opportunities Action Plan have already begun to address issues such as increasing data center capacity. However, one crucial area that is often overlooked is network infrastructure, where AI’s incredible potential lies.
To take full advantage of AI, the UK needs to invest in smarter, faster and more secure networks that can handle this change.
Why legacy networks fail to meet their goals
The demands that new technologies such as GenAI place on the network infrastructure are enormous.
Large Language Models (LLMs), which power AI tools like Microsoft Copilot, Google’s Gemini, and Open AI’s Chat-GPT, as well as AI-powered chatbots and more, require fast data processing, secure connectivity, and ultra-low latency.
Legacy networks cannot meet these needs efficiently and dynamically. Unlike AI-based networks that can adapt in real time, existing systems are static and inflexible.
This leads to inefficiencies that can limit productivity and growth gains. Our latest data shows that legacy networks can generate operational inefficiencies of around 20% to 25%. In addition, slow systems can frustrate customers, hinder innovation and prevent companies from effectively expanding their business.
Security is another major concern. Traditional networks are not designed to handle today’s cyber threats, which are often powered by artificial intelligence. This leaves companies and their customers vulnerable to data leaks and hacker attacks.
Artificial intelligence and next-generation smart networks
The rise of artificial intelligence requires dynamic networks that can optimize resource allocation and handle unpredictable traffic by continuously adapting to data needs. Just as cities today use dynamic traffic management and complex road systems, information networks must evolve into multi-lane information highways.
These networks must not only be able to process huge amounts of data, but also prioritize tasks such as fraud detection, supply chain optimization or real-time telemedicine diagnosis.
For example, advanced technologies such as software-defined networking (SD-WAN) can optimize traffic for AI workloads and proactively identify performance issues to minimize downtime.
Security frameworks such as Secure Access Service Edge (SASE) and Zero Trust enable organizations to proactively detect and respond to threats by detecting unusual network patterns. These networks use artificial intelligence to optimize their performance and protect sensitive data critical to the AI economy.
How AI-powered networks are changing industries
Artificial intelligence is driving transformative change in industries such as manufacturing, retail and financial services. For example, manufacturers are seeing increased productivity thanks to intelligent AI-connected systems that predict equipment failures and increase efficiency.
These changes help companies reduce downtime and improve profits.
Retail will also benefit greatly from AI. From hyper-customized shopping experiences to real-time inventory management and automated warehouses, AI is enabling new efficiencies and experiences for customers.
In financial services, AI enables real-time fraud detection and digital onboarding. With modern AI-powered networks, banks can accelerate fraud detection, improve customer experience and enable seamless interactions across multiple platforms.
Smart grids are critical to enable all this innovation and transform industries. According to a recent Cisco report, companies that deploy modern networks see a 43% increase in business and IT innovation. Additionally, our latest data suggests that this approach can reduce network operating costs by 25% to 30%.
Building the foundation for the UK AI economy
To foster an AI-driven future, the UK must make network modernization a national imperative. It’s not just a technical update. It is the foundation of economic resilience, innovation and global competitiveness.
But modernizing networks doesn’t necessarily mean starting from scratch. A gradual approach can help businesses make a smooth transition while minimizing disruption.
The first step for organizations should be to evaluate the current state of their network and identify inefficiencies. This allows them to draw up a clear modernization plan.
From there, companies can prioritize critical updates, focusing on areas such as AI-driven technology, transparent data sharing, and advanced security solutions. By addressing specific needs gradually, companies can make significant progress without overburdening their operations.
Network modernization as a business opportunity
Modernizing the electricity grid is an investment in growth and innovation and should not be seen as a cost item. Modern networks form the basis for supporting new digital services and stimulating growth.
They connect people, businesses and applications in a way that unlocks previously untapped potential. Imagine the benefits of a seamless shopping experience during peak season or when streaming a live global sporting event without buffering.
In today’s digital world, high-speed connectivity is not only a necessity, but also a long-term competitive advantage. By leveraging information networks as business enablers, companies can create a scalable, secure and resilient infrastructure that meets the needs of the AI-driven economy.