The Challenge of Unlocking AI’s Full Potential: Why Value Remains Elusive Despite Record Investments

AI Adoption Challenges and Opportunities: Insights from Red Hat’s Latest Report

A recent study conducted by Red Hat reveals that a significant number of businesses, approximately 89 percent, have yet to witness tangible customer benefits from their AI initiatives. Despite this, there is a projected 32 percent surge in AI investments by the year 2026.

The survey showcases that AI and security have emerged as the primary IT priorities for UK organizations in the coming 18 months. With 62 percent of respondents emphasizing their importance, these areas are closely followed by hybrid or multi-cloud strategies and virtualization, indicating a clear technological focus among British companies.

However, the journey towards AI integration is fraught with obstacles. The majority of organizations are grappling with adoption barriers, with concerns over implementation and maintenance costs ranking as the top challenge for 34 percent of participants. Data privacy and security issues closely follow at 30 percent, while 28 percent are struggling with AI integration into their existing systems.

An intriguing discovery from the study is the prevalence of “shadow AI,” where 83 percent of organizations report unauthorized usage of AI tools by employees. This phenomenon suggests a disconnect between official IT strategies and employee practices, potentially leading to security vulnerabilities and operational inefficiencies.

To address these hurdles, UK enterprises are increasingly turning to open-source software. The survey highlights that 84 percent of respondents view enterprise open source as crucial for their AI strategies, with similar sentiments expressed for virtualization, hybrid and multi-cloud environments, and security.

Joanna Hodgson, UK Country Manager at Red Hat, notes, “This year’s survey results underscore the gap between aspirations and practical outcomes. While organizations are investing significantly in AI, only a few have managed to deliver tangible customer value. To bridge this gap, a solid foundation of enterprise knowledge and seamless integration with existing systems is imperative to unlock the value of AI.”

Hodgson adds, “Openness fosters collaboration, encourages best practices sharing, and enables adaptability. Similar to the success seen with hybrid cloud investments, open-source will continue to play a pivotal role in making AI more accessible and reusable.”

The survey delves into specific AI areas receiving heightened focus. Agentic AI, characterized by systems operating autonomously, takes precedence for 68 percent of respondents. This priority is followed by efforts to promote widespread employee adoption and operationalize AI.

The persistent challenge of skills gaps remains a critical issue, with AI ranking as the most urgent concern for the second consecutive year. Within the AI domain, shortages are particularly acute in agentic AI, efficient utilization of AI capabilities, and educating the broader business on AI utilization.

Despite domestic hurdles, there is a prevailing optimism regarding the UK’s global AI standing. 83 percent of respondents believe the UK is either already a global AI frontrunner or has the potential to become one within the next three years. Nevertheless, concerns linger around talent pipeline shortages, limited public funding, and inadequate private sector involvement, all of which impede the UK’s ability to derive maximum value from AI.

The report also touches upon the complexities surrounding cloud adoption, further compounded by AI workload integration. Internal silos, sovereignty issues, and unclear ROI continue to pose challenges. In response, UK organizations are prioritizing operational control, securing the software supply chain, and maintaining flexibility in selecting IT vendors.

Hans Roth, SVP and GM for EMEA at Red Hat, remarks, “Organizations seek enhanced operational control and IT resilience to navigate a landscape of constant disruptions. Sovereignty features prominently in enterprise cloud strategies and the burgeoning AI landscape.”

Roth adds, “Open-source is pivotal in this transformation, providing businesses with transparency and flexibility to drive rapid innovation without compromises.”

The findings from Red Hat’s survey underscore the UK’s readiness to leverage AI’s value potential while grappling with implementation complexities, skills shortages, and technological environment intricacies. The strong emphasis on open-source signifies a pragmatic approach, promoting collaboration and flexibility in the pursuit of AI-driven innovation.