The government’s decision to place artificial intelligence at the centre of its industrial strategy has been broadly welcomed by business leaders, although many are warning that the real challenge will be delivering practical support rather than simply reshuffling departments.

Prime Minister Andy Burnham’s decision to abolish the Department for Science, Innovation and Technology (DSIT) has seen its responsibilities divided between Jonathan Reynolds’ new Business, Innovation, Science and Trade department and an expanded Culture portfolio under Lisa Nandy. At the same time, Kanishka Narayan has become the UK’s first AI Minister to sit at Cabinet level.

The move has been viewed as a significant statement of intent, with businesses recognising the government’s ambition to position the UK as a global leader in AI and innovation. However, organisations across the technology, recruitment and marketing sectors are also calling for policy stability, clear guidance and continued investment to ensure that ambition translates into long-term economic growth.

Tom McDannell, Managing Director at ForrestBrown, welcomed the government’s aspirations but cautioned against disrupting the progress made under the previous administration.

“While Andy Burnham’s ambition to make the UK the world’s leading innovation nation is welcome, the decision to abolish DSIT raises concerns about how that ambition will be delivered. The previous government left strong foundations, and there is naturally a risk that sudden upheaval could slow investment across the tech sector. With the US doubling down on support for mission-critical industries including data centres, AI and energy infrastructure, the UK needs a clear and consistent innovation strategy to compete globally.”

McDannell also believes AI should not become the sole focus of the UK’s innovation agenda.

“Kanishka Narayan’s appointment gives AI a welcome voice at Cabinet level and brings a strong recognition of the UK’s startup ecosystem into government. That said, this focus must not come at the expense of science and other high-growth sectors.”

He also stressed the importance of maintaining incentives that encourage businesses of all sizes to invest in research and development alongside targeted government funding.

For employers already introducing AI into their organisations, the priority is less about ministerial titles and more about receiving practical support. Charles Hipps, Founder and CEO of recruitment technology company Oleeo, believes businesses are looking for clear guidance on how AI should be implemented responsibly, particularly where important decisions affect people.

“Giving the AI minister a seat at Cabinet is significant, but the appointment will be judged on whether employers notice any practical difference. Businesses are already using this technology. What many still lack is clear guidance on how to use it when the outcome affects an employee, a job applicant or a customer.”

Hipps points to recent Office for National Statistics data showing AI adoption has accelerated rapidly, while many organisations are still developing the governance, training and accountability needed to use it effectively.

He argues that recruitment highlights these challenges particularly clearly, where employers must understand when AI has influenced hiring decisions, how outputs have been checked and who remains accountable if mistakes are made.

“The appointments place AI closer to the centre of government, but that alone is not an achievement. The test is whether employers get clearer answers on transparency, training and accountability. At the moment, too many are being told to adopt AI without being shown what responsible adoption looks like in practice.”

The importance of responsible AI was also highlighted by Rachel Aldighieri, CEO of the Data & Marketing Association (DMA), who believes the Cabinet appointment sends a positive signal about the UK’s ambitions.

“The appointment of an AI Minister at Cabinet level is a welcome and important signal that the UK intends to take AI seriously as a driver of economic growth, innovation and global competitiveness.”

However, she says long-term success will depend on maintaining public trust and providing businesses with confidence that innovation will be supported alongside appropriate safeguards.

“The UK has a real opportunity to become a world leader in AI-enabled marketing and customer engagement, but that leadership will only be sustainable if it is built on trust, transparency and the responsible use of data.”

Aldighieri also believes the government’s restructuring presents an opportunity, provided the strengths developed under DSIT are not lost during the transition.

“A critical test will be ensuring the successes of DSIT are preserved and that the opportunities created by bringing together DCMS and the new business department are fully realised.”

Taken together, the reaction from business is one of cautious optimism. Industry leaders welcome AI receiving greater prominence at the heart of government and recognise the potential benefits of bringing innovation closer to wider economic policy. At the same time, they are united in calling for consistency, practical guidance and long-term certainty.

For many businesses, the success of the government’s reforms will not be judged by the machinery of government itself, but by whether they make it easier to innovate, invest and adopt AI responsibly in the years ahead.