Artificial intelligence could generate more than £105 billion in additional revenue for UK medium-sized businesses by the end of the decade, according to new economic modeling that shows how quickly AI is reshaping the country’s business landscape.
The research, conducted by the Center for Economics and Business Research (Cebr) on behalf of HSBC UK, suggests that companies that integrate AI into their operations are starting to break away from competitors who are slower to adopt the technology.
In parallel with the report, HSBC UK has launched a £5 billion AI and productivity funding initiative to help companies invest in the technology, skills and systems needed to deploy AI at scale.
The analysis focuses on the UK’s mid-market companies, companies with annual sales of between £15m and £300m, which are often referred to as the ‘engine room’ of the UK economy due to their ability to combine the agility of smaller businesses with the investment capacity of larger organisations.
There are around 35,000 such companies operating across the UK. In 2025, they generated 23 percent more value per employee than the overall economy, underscoring their growing importance as an engine of productivity and growth.
The study shows that AI is increasingly becoming a dividing line between companies that are moving faster and those that are at risk of falling behind.
Two years ago, only around 35 percent of medium-sized companies used AI in some form. By the end of 2025, this figure had increased significantly to 55 percent, reflecting the rapid mainstream adoption of large language models, advanced analytics and workflow automation tools across many industries.
However, the report notes that there is a clear distinction between companies that are experimenting with AI and those that are embedding it deeply into core business functions.
Approximately 24 percent of midsize companies are now classified as “productive users,” organizations that integrate AI into critical processes such as forecasting, supply chain management, reporting, customer engagement and operational decision-making.
These companies are seeing measurable improvements in both productivity and revenue.
According to the study, companies that integrate AI into their processes record an average increase in sales of around four percent per employee.
For a typical medium-sized business, this could mean an additional £4.5 million in turnover and around £1.3 million in additional economic value within four years, compared to companies that have not yet adopted the technology.
If rollout continues at the current pace, the cumulative impact could be significant. The modeling suggests that AI-driven productivity improvements across the middle class could deliver £105 billion in additional revenue to the UK economy and £31 billion in economic output by 2030.
Looking further ahead, the study estimates that the adoption of AI by medium-sized businesses could generate more than £500 billion in additional revenue by 2050, although increases are expected to slow as the technology becomes widespread across all industries.
James Cundy, managing director and head of corporate and leveraged finance at HSBC UK, said the results underline the growing importance of AI investment for companies’ competitiveness.
“Small businesses play a central role in the UK’s growth,” he said. “Our findings suggest that adopting AI could strengthen one of the economy’s key growth engines.
“The opportunity is great, but it requires confidence to invest. Our focus is on supporting businesses to invest in the technology, skills and innovation that will shape the UK’s next phase of growth.”
With the new funding initiative, HSBC aims to provide companies with access to finance on commercial terms to support AI investments in areas such as digital infrastructure, data systems, workforce training and automation.
Cundy emphasized that the greatest gains will come from companies that go beyond experimentation and integrate AI into their decision-making and operational processes.
“The distinction between experimentation and integration is crucial,” he said. “Companies that apply AI to operations, people processes and strategic decisions see measurable improvements in productivity and revenue.”
Economists say the study highlights the growing role of technology in shaping productivity outcomes across the UK economy.
Nina Skero, executive director of the Center for Economics and Business Research, said the results suggest there is still significant scope for small and medium-sized businesses to benefit from AI-driven productivity improvements.
“Our research shows that AI is already starting to impact the productivity outcomes of mid-sized companies in meaningful ways,” she said.
“However, productive users remain a minority in the mid-market. This suggests there is still significant scope for growth. As more companies move from early adoption to deeper integration, the combined impact on UK productivity and national output could be significant by the end of the decade.”
The report concludes that the pace at which companies move from experimentation to full integration will ultimately determine how much of the potential £105 billion opportunity is realized.
