AI is reshaping the global economy, and the UK has a chance to lead this transformation. According to recent Microsoft data, AI is set to boost UK GDP by an estimated £550 billion by 2035, creating new job opportunities and driving productivity.
However, the UK must urgently upgrade its AI infrastructure to capitalise on this growth. A recent report from the Tony Blair Institute highlights that the UK controls just 3% of global computing power required to support an AI-led economy. In comparison, the United States owns 75% of the world’s AI supercomputers. Without addressing this imbalance, the UK risks falling behind in the AI race.
Government initiatives, such as the AI Opportunities Action Plan, have already started to address issues like expanding data centre capacity. But one critical area that often remains overlooked is the network infrastructure underpinning all of AI's incredible potential. To fully unlock the benefits of AI, the UK must invest in smarter, faster, and more secure networks that can handle this transformation.
Why legacy networks are not fit for purpose
The demands that emerging technologies such as GenAI place on network infrastructure are huge. Large language models (LLMs) which power AI tools such as Microsoft Copilot, Google’s Gemini and Open AI’s Chat-GPT as well as AI-powered chatbots and more, demand rapid data processing, secure connectivity, and ultra-low latency.
Legacy networks lack the ability to manage these demands efficiently and dynamically. Unlike AI-ready networks, which can adapt in real time, legacy systems are static and rigid. This results in inefficiencies that can limit productivity and growth gains. Our latest data shows that legacy networks can introduce operational inefficiencies of about 20%-25%. Moreover, slow systems can frustrate customers, discourage innovation, and leave businesses unable to scale operations effectively.
Security is another major concern. Legacy networks weren’t designed to handle today’s cyber threats which are often themselves AI-powered. This leaves organisations and their customers vulnerable to data breaches and hacking.
AI and the next generation of intelligent networks
The rise of AI calls for dynamic networks that can optimise resource allocation and manage unpredictable traffic by constantly adapting to data demands. Just like cities today use dynamic traffic management and complex road systems, information networks need to evolve to become multi-lane information highways.
"These networks should be able to handle not only vast volumes of data but be able to prioritise tasks like fraud detection, supply chain optimisation, or telemedicine diagnostics, all in real time."
For instance, advanced technologies like Software-Defined Networking (SD-WAN) can optimise traffic for AI workloads and proactively detect performance issues to minimise downtime. Security frameworks such as Secure Access Service Edge (SASE) and Zero Trust allow organisations to proactively identify and respond to threats by detecting unusual network patterns. These networks use AI to optimise their performance and protect sensitive data which is crucial to the AI economy.
How AI-driven networks are transforming industries
AI is fuelling transformative changes across industries like manufacturing, retail, and financial services. For instance, manufacturers are seeing enhanced productivity through smart, AI-connected systems that predict equipment failures and boost efficiency. These changes are helping companies reduce downtime and improve their bottom line.
Retail also stands to benefit immensely from AI. From hyper-personalised shopping experiences to real-time inventory management and automated warehouses, AI is unlocking new efficiencies and customer experiences.
In financial services, AI is driving real-time fraud detection and digital onboarding. With modern, AI-driven networks, banks can accelerate fraud detection, improve customer experiences and enable seamless interactions across multiple platforms.
Intelligent networks are key to enabling all these innovations and transforming industries. According to a recent Cisco report, organisations that deploy modern networks report a 43% increase in business and IT innovation. Moreover, our recent data indicates that this approach can reduce network operation cost by 25% - 30%.
Building the foundations for the UK’s AI economy
To power an AI-driven future, the UK must prioritise network modernisation as a national imperative. This is not merely a technical upgrade. It is the foundation for economic resilience, innovation, and global competitiveness.
However, modernising networks does not have to mean starting from scratch. A phased approach can help businesses transition smoothly while minimising disruption. The first step for organisations should be assessing the current state of their networks and identifying inefficiencies. This allows them to create a clear modernisation plan.
From there, businesses can prioritise essential upgrades, focusing on areas such as AI-ready technologies, seamless data exchange, and advanced security solutions. By addressing specific needs in stages, enterprises can achieve meaningful progress without overwhelming their operations.
Network modernisation as a business enabler
Network modernisation is an investment in growth and innovation, it should not be viewed as a cost. Modern networks are the foundation for supporting new digital services and driving growth. They connect people, businesses, and applications in ways that unlock previously untapped potential. Imagine the benefits of delivering a seamless shopping experience during busy sales periods or live streaming a global sports event with zero buffering. In today’s digital world high-speed connectivity is not just a necessity but a long-term competitive advantage.
By treating information networks as a business enabler, organisations can build scalable, secure, and resilient infrastructure capable of meeting the demands of the AI economy.
To know more how Tata Communications' network fabric powers a next-generation network, click here: Digital Fabric for Connected Enterprises
