UK&I leaders say GenAI success depends on the balance between risk and reward

HFS recently published a Market Impact report imploring enterprises to be bold and action-oriented when driving generative AI (GenAI) adoption, focusing on C-suite leaders in the UK and Ireland (UK&I). You can read it here. To complement our research findings, in partnership with Cognizant, HFS hosted senior executives for a Roundtable in London to discuss if UK&I firms are being bold enough with GenAI. Unsurprisingly, discussions quickly jumped to the region’s unique position as an AI hotbed, GenAI adoption challenges, and how cautious enterprises from the UK&I must find the perfect balance between risk and reward for GenAI adoption.

UK&I firms are pushing forward with GenAI investments

We kicked off our Roundtable by discussing the critical role UK&I-based firms will play in the future of AI and why many consider the region an AI hotbed. Our data supports this. Looking at Exhibit 1, we can see that a higher percentage of enterprises are working with GenAI in the UK&I than in the rest of the world.

Exhibit 1: While much of the world looks on, UK&I enterprise leaders are more likely to be getting their hands dirty with GenAl

Source: HFS Pulse, H1, 2024. N = UK&I 66/Global 409

There are countless examples of the UK&I driving forward with AI adoption, too—take the UK’s National AI Strategy and the fact the government has invested £2.4 billion in AI since 2014. Adding to that is the fact that UK&I is home to two of the five academic institutions outside of the US listed in EduRank’s top 20 for AI, and even that Google-owned DeepMind was founded in UK&I, although it has since moved to Silicon Valley—meaning some of the most significant AI research breakthroughs ever were in the UK&I.

While the UK&I is an AI center, one key difference exists between enterprises in this region and their US counterparts. Rohit Gupta, Cognizant’s UK&I country head, explained that organizations in the UK&I are typically much more cautious while US firms steam forward—and UK&I organizations must address to reap the total rewards of GenAI.

Enterprises in the UK&I are battling challenges such as AI ethics and regulations

Organizations globally battle similar challenges when driving GenAI adoption in their business—but there are different nuances across geographies and industries. For example, firms from every region find that slow-learning regulators stunt GenAI progress. However, delving into geographic differences, European Union (EU)-based firms are subject to the EU AI Act, which sets blanket regulatory standards across the region—a standout approach compared to the rest of the world. Interestingly, because of Brexit, UK-based firms aren’t subject to this law—the UK government instead opted to apply an incremental approach to AI regulation. This might present another opportunity for the UK to present itself as an AI leader, offering a good balance of risk and reward, as they give UK firms space to explore GenAI.

However, they must be mindful of AI ethics while doing so. Roundtable conversations centered around AI’s potential impact on marginalized groups and its potential to reinforce existing biases if not managed effectively—which is why regulation, including self-regulation, is critical. Surprisingly, one delegate explained that their organization has hundreds of thousands of employees and is moving forward with GenAI adoption—but with no established AI ethics practice—something they are naturally uncomfortable with. They believe this is less of a concern for firms operating solely in the US, for example, as they can train large language models (LLM) on vast quantities of privately purchased personal data, while an enterprise operating in any capacity in the EU cannot do this due to GDPR laws.

A handful of cautious organizations are navigating these challenges to balance risk and reward

Finding the balance between risk and reward is not easy. Every enterprise pushing forward should establish its own set of AI ethics guidelines, but there are other ways firms are addressing this, too. For example, the Roundtable attendees agreed they favor internal use cases over external ones, meaning consumers and regulators won’t see any AI blunders, giving firms vital time to address them internally. This means enterprises can mitigate risk while pushing on to reap the rewards of GenAI.

Looping back to regulatory challenges, one roundtable attendee explained how they navigated slow-learning regulators. Instead of waiting for them to establish their own AI guidelines or pushing on despite the clear risk, they worked directly with the regulator to advance their understanding. This involved hosting workshops with key stakeholders and helping them shape the regulation—all while moving their own GenAI projects forward and realizing the rewards.

The Bottom Line: UK&I firms must overcome their cautious mindsets and find the right risk-to-reward balance to drive GenAI adoption.

GenAI adoption doesn’t come without risks—and we know that firms in the UK&I tend to be more cautious than their US counterparts. Regional leaders have confessed that ethical and regulatory challenges are hindering their GenAI projects—stopping them from reaching their full potential. However, savvy firms must take matters into their own hands to find the proper risk-to-reward ratio, find smart workarounds, and drive regulation themselves to ensure they realize the full benefits of GenAI.