Security and Copyright Fears Hold Up AI Adoption

By the Editorial Team · Monday, July 27, 2026

A report from the Federation of Small Businesses reveals that data security, copyright, and liability concerns are hindering widespread AI adoption among small UK businesses, despite notable productivity and revenue gains. The FSB calls on the government to provide clearer guidance and support to help small firms safely implement AI and overcome legal uncertainties.

Concerns over data security, copyright, and liability are delaying the wider adoption of artificial intelligence (AI) technologies among small businesses, according to a recent report by the Federation of Small Businesses (FSB). While many small companies are beginning to experience productivity improvements from AI tools, uncertainties about legal and operational risks remain significant barriers.

The FSB, the United Kingdom’s largest employers’ group, found that although AI adoption among smaller businesses has nearly tripled since 2023, more than 90% of these firms still harbor concerns about how to safely implement the technology. About one in three respondents indicated that clearer guidance on AI deployment would encourage them to embrace the technology more fully. The study highlighted that around 60% of small businesses reported some productivity gains linked to large language models such as those developed by OpenAI and Anthropic, and roughly 25% noted an increase in revenues stemming from AI use.

Despite this progress, the Office for National Statistics (ONS) observed that AI has been adopted relatively lightly among UK businesses with 10 or more employees. The average number of AI technologies used per company rose only slightly from approximately 1.4 to 1.6 between 2023 and 2026, suggesting slow and cautious uptake even in larger firms.

Tina McKenzie, policy chair at the FSB, emphasized the need for government intervention to foster greater trust and clarity. “Too many small firms are still asking fundamental questions about data ownership, copyright, and liability,” she said. McKenzie urged the new AI minister, Kanishka Narayan—who recently joined the cabinet—to prioritize providing explicit answers to these issues. She argued that clear policies on the ownership of AI-generated content, data usage, and accountability in case of AI errors are crucial for small businesses to move forward confidently.

McKenzie also stressed the importance of practical support, recommending that government initiatives ensure small firms do not face the complexities of AI adoption alone. “Small businesses must have access to straightforward guidance and resources to adopt AI safely and responsibly,” she added.

The report’s release comes amid heightened scrutiny over whether the growing investment in AI technology will translate into meaningful productivity gains across the economy. The government’s approach to balancing innovation encouragement with regulatory clarity will likely be a key factor influencing how swiftly and broadly AI is integrated within the small business sector.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.