new report research has found that the majority of UK businesses plan to increase spending on AI infrastructure, prioritizing increased data, storage and compute, despite only 25% achieving a positive ROI on AI projects to date.
Developed in collaboration with Vanson Bourne, Wasabi surveyed 1,700 IT decision makers around the world, 200 of whom were based in the UK. The data confirms that while UK businesses are investing in data infrastructure to support AI, cloud storage charges are causing organizations to overspend.
The report shows that 56% of UK businesses plan to increase investment, although the majority are still not achieving a positive ROI. Despite this, almost half (4%) believe they will see positive returns next year.
When asked about the challenges they face in implementing AI projects and solutions, data storage challenges such as cost, data access, and management were the most commonly cited responses.
Below, we take a look at some key data points and takeaways from the report.
AI budget allocation prioritizes infrastructure, not software
When asked about their infrastructure budget for AI, only 3% of UK respondents said they would cut spending. Over the next year, a majority say they will either increase their infrastructure budget for AI projects (56%) or maintain their existing budget (42%).
In the UK, the majority of AI budgets (62%) are spent on the data, storage and processing power needed to supply and run AI applications. Meanwhile, surprisingly, only 36% is allocated to AI software/SaaS solutions.
72% of UK respondents say they are deploying hybrid storage solutions (a combination of on-premises and public cloud) to support AI workflows. It demonstrates the flexibility and potential complexity that organizations are dealing with when it comes to managing AI-related data across multiple environments.
Security and budget concerns
Cloud storage service providers play an important role in helping users access their data securely. but, Only half (51%) of UK organizations are fully confident that their data meets regulatory/compliance requirements when audited by a third party.
Meanwhile, 62% are not completely confident that their data will remain operational and unaltered following a cyberattack, significantly higher than the global average of 53%.
UK businesses are understandably nervous about the plethora of cyber threats that present an opportunity for cloud providers to step up and foster trust.
When asked why they are unsure, many respondents say public cloud vendors do not provide the tools they need to mitigate cyber-attacks, highlighting a market opportunity for more innovative and expansive data storage capabilities.
48% of UK cloud storage spending is allocated to fees rather than actual storage capacity. One of the consequences of this high fee structure is budgetary concerns. In 2025, 46% of UK respondents say their cloud storage spending will exceed their budget.
Why infrastructure now takes the lead
“If you look at the revenue allocation at the highest level of the public cloud services market, the majority of it comes from software/SaaS rather than infrastructure services (IaaS),” said Andrew Smith, director of strategy and market intelligence at Wasabi Technologies.
“But new AI workloads and initiatives are really changing this dynamic. What’s interesting about this year’s findings is that most AI budgets are being allocated to infrastructure rather than SaaS.
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“In other words, this is the exact opposite of what we would expect from a traditional market perspective, and it highlights the critical role that cloud storage and cloud infrastructure services will play in building this generation of AI-enabled solutions and services.”
“As organizations scale their AI efforts, they face increasing data storage and data quality challenges that can quickly erode ROI if not managed effectively,” said Dave Friend, Founder and CEO of Wasabi Technologies. “Cost-effective and reliable storage is essential to make high-quality data readily available to AI models, enabling better outcomes without incurring unsustainable infrastructure costs.
“This recognizes the need for affordable, secure, and high-performance cloud storage to help you stay within budget and keep your data secure and accessible.”
