Artificial intelligence (AI) is rarely out of the headlines. Depending on who you listen to, it is either the defining opportunity of our time or a disruptive force we are only beginning to understand. The reality, as ever, sits somewhere in between.
What is clear is that AI is no longer a distant concept or a niche technology. It is already shaping how businesses operate, how decisions are made and how new ideas come to market.
The question for Wales is not whether AI will have an impact, but how we make that impact work for our economy, our businesses and our communities.
From our vantage point at the Development Bank of Wales, we are seeing that shift happen in real time. The leading Large Language Model (LLM) providers are leapfrogging each other with extraordinary speed and frankly startling progress in capability. Innovation is accelerating – with AI driving it.
Welsh Businesses Embrace AI
One of the most encouraging trends we see is the growing number of Welsh businesses using AI as part of their core proposition. These are not abstract ideas or speculative concepts. They are practical applications. These are companies using data, automation and machine learning to solve real-world problems. In sectors as diverse as energy, life sciences, fintech and advanced manufacturing, founders are building products and services that would have been far harder to develop even a few years ago.
AI, in that sense, is acting as an accelerator. It is helping businesses move faster from concept to commercialisation, test ideas more quickly and operate at a scale that would previously have required far greater resource.
Wales has always had strong foundations in innovation, from industrial heritage to academic research and emerging technology clusters. AI adds another layer to that capability.
But it is important to be clear-eyed. Not every business with “AI” in its pitch deck is investable, and the fundamentals still matter. At the Development Bank of Wales, we assess every opportunity on its individual merit; this includes the strength of the team, the clarity of the market need, and the path to sustainable growth. AI can enhance a proposition. It cannot replace one. Productivity matters just as much as innovation.
What Investors Seek in an AI Proposition
Just as importantly, investors are paying closer attention to the practicalities: cost, delivery and risk. AI can introduce new ongoing costs (such as token costs, software licenses, cloud storage and specialist skills), and it can create new responsibilities around security, privacy and quality control.
The most investable teams can explain the business case clearly, show how the technology will be used safely with customer data, and set out sensible checks and governance from day one, particularly in sectors such as finance, healthcare and the public sector.
Used well, AI can take on routine, time-consuming tasks that sit behind almost every business. Administrative processes, data handling, reporting, customer queries, all areas where time is often stretched and margins are tight.
The benefit is not simply about doing things faster. It is about freeing up capacity for the work that actually drives value: judgement, creativity, sales, marketing and building relationships.
For a small business owner, that might mean spending less time on paperwork and more time with customers. For a growing company, it could mean scaling operations without immediately increasing headcount. For established firms, it offers a way to improve efficiency and remain competitive in changing markets.
In a nation like Wales, where many businesses are SMEs operating with finite resource, those gains matter.
We are already seeing examples of Welsh firms using AI in practical, grounded ways — not as a headline feature, but as a tool embedded into everyday operations. That quiet adoption may ultimately prove more transformative than the headline-grabbing breakthroughs.
The challenge, as with finance, is often not awareness but confidence. Knowing where to start, which tools to trust and how to integrate them safely into existing processes can be a barrier. That is where support, guidance and shared learning become important.
However, there are risks with AI too. Ideas can become infinitely copyable. Simple short-cuts using AI will ultimately be used by everyone. Where, historically, a business might have had barriers to entry that protected their market niche, those barriers may not provide the same level of protection and may be breached much more easily. Complacent businesses will struggle.
The technology is moving so fast that there is an attitude among some that there is no need to rush to jump in. “Let’s wait to see who /what comes out as a winner” is the mantra of some. Unfortunately, however, few businesses can afford to wait. Just ask one of the LLMs a detailed question about your own business and be amazed at the result.
Putting AI to Work at the Development Bank of Wales
It would be inconsistent to encourage Welsh businesses to embrace AI without doing the same ourselves.
Within the Development Bank of Wales, our approach is deliberately calm and practical. We are not looking for technology for its own sake. We are focused on how AI can strengthen the way our teams work and add value to the roles they perform every day.
That starts with making sure colleagues have access to the right, approved tools, supported by clear guidance and guardrails. Confidence matters. People need to understand not only what AI can do, but how to use it responsibly and effectively.
As a result, every colleague has been put through initial training and encouraged to use AI in their daily tasks. Within the business we have already identified 30 AI champions positioned throughout the business, given enhanced training and more AI tools to see what they can deliver but also to support their colleagues.
Our initial objective is for AI to act as a personal productivity enabler across the organisation – to help reduce administrative and repetitive tasks, freeing up time for the areas where we believe that human judgement is essential. That is particularly relevant in a development bank. Our role is not simply transactional. It relies on insight, experience and local understanding. If AI can help us spend more time on those elements, then it is doing its job.
It is also possible that this type of human judgement such as assessing businesses on the ground, understanding risk, building relationships and supporting customers will become increasingly rare as AI influences other investors and lenders.
We are also seeing potential to use AI to support better decision-making, not by replacing human input, but by enhancing it. Better use of data, clearer analysis and more efficient processes all contribute to stronger outcomes for the businesses we support.
A Practical Opportunity Available Now
There is a tendency, with technologies like AI, to frame them as something that will transform the economy at some point in the future. In reality, that transformation is already under way, but it is happening incrementally, through thousands of small, practical changes rather than a single defining moment. But, perhaps unusually, it is you and your colleagues that have far greater control – ideas that required expert input, process, time and cost are available at your fingertips.
For Wales, the opportunity is clear. We have innovative businesses already using AI to build new solutions. We have a broad base of companies that can benefit from improved productivity. And we have institutions, including ourselves, that can help create the conditions for that adoption to happen responsibly and at pace.
As ever, this is not about one organisation or one sector. It is about an ecosystem: businesses, funders, educators and policymakers working together to build confidence and capability.
AI will not solve every challenge facing the Welsh economy. But used well, it can help us do more with the strengths we already have. Not being used at all risks businesses being left behind by a market that will be accelerating away faster than ever.
The more challenging research analysis on the impact of AI presents a bleak picture of a dramatic reduction in personnel in many roles, replaced by an algorithm. A more aspirational analysis is that the algorithm replaces the mundane and allows colleagues to increase their focus on adding value – it is this model that we are seeking to achieve for our customers.
Wales has never lacked ideas or ambition. The task now is to apply the tools available to us - including AI - in a way that turns that ambition into sustained, practical growth.
Giles Thorley is chief executive of the Development Bank of Wales
