Welsh firms face an AI skills gap, even as half plan to increase investment in AI skills over the coming year, according to research from the Lloyds Business Barometer.
42% of Welsh businesses say their workforce does not have the AI skills needed to meet business requirements and stay competitive – well above the UK average of 31%. Just 41% say their workforce does have the skills needed.
In response, 51% of firms in the region plan to increase investment in AI to upskill their workforce in the coming year. Of those increasing investment, 27% expect to spend between £25,000 and £100,000, while 22% expect to spend between £100,000 and £250,000.
53% of the region's firms saying they currently use AI, but just 14% of Welsh businesses using AI say it has created new jobs in their firm.
AI becoming essential for competitiveness
53% of Welsh firms say that businesses which fail to adopt AI in the next three years will be at a competitive disadvantage, suggesting AI is increasingly viewed as a competitive necessity.
Businesses in the region using AI cited a lack of understanding (43%), access to skills (14%) and security concerns (13%) as the main challenges to getting greater value from AI.
Nathan Morgan, Area Director for Wales at Lloyds, said:
“AI has the potential to help Welsh businesses grow and stay competitive and research shows there's still work to do to build the skills needed to make the most of the technology.
“It's encouraging that more than half of firms in Wales plan to increase investment in AI skills over the coming year. That focus on upskilling will be important for businesses to help close the gap and adopt new tools with confidence.
“With many firms already recognising the risk of falling behind, the priority now is turning ambition into action. We'll continue to support Welsh businesses as they invest in their people, build capability and prepare for the future.”
Amanda Murphy, CEO of Lloyds Business and Commercial Banking, said:
“AI has the potential to be as transformative for businesses as the internet was a generation ago. The businesses seeing the greatest benefit are treating it not simply as a technology investment, but as a catalyst for broader transformation across their organisation.
“Success will depend on more than access to technology. It will come from building the skills, culture and confidence to use it effectively. The businesses that can combine human ingenuity with the power of AI will create a meaningful advantage in productivity, innovation and growth.
“As adoption accelerates, the greatest challenge for many organisations may not be keeping pace with technology, but ensuring they have the capabilities to adapt alongside it. Supporting businesses to navigate that transition will be critical if the UK is to fully capture the economic opportunity AI presents.”
More than half of UK businesses (54%) say AI has created new jobs, and 58% plan to invest in AI skills.
31% say their workforce does not yet have the AI skills needed and 58% of UK firms say businesses risk falling behind competitors if they fail to adopt AI.
For UK businesses overall, cost, data quality and skills are the biggest barriers to getting more value from AI.
Lloyds is also investing in its own AI capability. In June, the Group announced plans for more than 1,000 AI-related roles in 2026, including almost 300 agentic AI-related roles and one of the first Level 6 AI Engineering apprenticeships by a UK bank.
More than 400,000 AI Academy courses have been taken since January, with over 65,000 colleagues completing training on working responsibly with AI.
