UK Tech Investment Trends: Cybersecurity Surpasses AI by 2026

A notable shift in UK tech investment trends for 2026 is underway. Cybersecurity is now projected to receive larger budget increases than Artificial Intelligence (AI). This insight comes from a recent study by KPMG, outlining evolving priorities.

What Happened

Cybersecurity is set to receive the largest budget increases in investment over the next 12 months in the UK. This development marks a significant change in UK investment priorities for 2026.

Details From Sources

A poll of 151 UK business leaders conducted by KPMG indicates cybersecurity as the primary focus for large-scale increased investment. The KPMG Global Tech Report 2026 reveals that 57% of UK companies plan to increase their cybersecurity budget by over 10% in the coming year. In contrast, only 46% of UK companies sanctioned a similar increase for AI investment.

The UK’s emphasis on cybersecurity is higher than the global average. Globally, 41% of firms plan to increase cybersecurity budgets by more than 10%, according to the KPMG Global Tech Report 2026. Overall, 84% of respondents reported some level of increase in AI investment, while 83% focused on cybersecurity. Paul Henninger, head of technology and data at KPMG, stated that UK organizations are prioritizing cyber resilience. He described this focus as a “sensible shift.”

Why This Matters

This shift in UK investment priorities reflects growing concerns over new threats. It also addresses defence gaps created by rapid AI transformations. High-profile cyber-attacks on global corporations and ongoing geopolitical tensions contribute to this heightened focus on security.

Background Context

Previous studies have shown mixed returns on AI investments. An MIT study found fewer than one-in-ten firms saw a return on investment (ROI) from AI. Furthermore, a PwC analysis indicated that 56% of CEOs believe they have seen “no benefit” from AI funding. Globally, cybersecurity maturity is more advanced. The KPMG Global Tech Report 2026 shows 18% of firms have fully scaled cybersecurity, compared to 10% for AI and automation.

Industry Reactions

Paul Henninger of KPMG emphasized the importance of treating cyber as an enabler of growth. He stressed embedding security into cloud and AI from day one. Globally, 68% of executives anticipate innovating and deploying AI use cases in 2026, expecting ROI, according to the KPMG Global Tech Report 2026. In the UK, 91% of researchers believe AI will transition from an efficiency enabler to a revenue-driving innovation in 2026.

Furthermore, 89% of UK respondents are investing in agentic AI. Agentic AI refers to systems that take action beyond merely answering questions. These businesses expect a hybrid human and digital workforce. The KPMG Global Tech Report 2026 also notes that 90% of UK respondents confirmed hiring plans include specialist AI roles. These roles include prompt engineers, AI ethicists, and machine learning operations specialists. Paul Henninger highlighted governance and talent as differentiators for agentic AI. He stressed the need for guardrails like identity controls and human oversight.

Related Data or Statistics

57% of UK companies plan >10% increase in cybersecurity budget.
46% of UK companies plan >10% increase in AI budget.
41% global average for >10% increase in cybersecurity budget.
84% of UK respondents report some increase in AI investment.
83% of UK respondents report some increase in cybersecurity investment.
18% of firms globally have fully scaled cybersecurity.
10% of firms globally have fully scaled AI and automation.
68% of global executives expect AI ROI in 2026.
91% of UK respondents think AI will be revenue-driving innovation in 2026.
89% of UK respondents investing in agentic AI.
90% of UK respondents plan to hire specialist AI roles.
56% of CEOs saw “no benefit” from tech funding (PwC analysis).
Fewer than one-in-ten firms investing in AI enjoyed ROI (MIT study).

Future Implications (speculative)

The continued investment in agentic AI and specialist AI roles suggests a future workforce integration of human and digital capabilities. The strong belief in AI’s future ROI in the UK, despite current muted returns, indicates an expectation of significant value delivery from these investments.

Conclusion

Cybersecurity is now a top UK tech investment priority for 2026. It surpasses AI for major budget increases, as reported by KPMG. This shift is driven by growing threat concerns and the need for cyber resilience. Despite this, an optimistic outlook for AI’s future returns persists among UK business leaders.

FAQ

Q: What is the primary focus of UK tech investment for 2026?

A: A KPMG study indicates that cybersecurity is set to be the top priority for significant budget increases in UK tech investment for 2026.

Q: How much more are UK companies investing in cybersecurity compared to AI?

A: 57% of UK companies plan to increase their cybersecurity budget by over 10%, while only 46% plan the same level of increase for AI, according to KPMG.

Q: What is “Agentic AI” and why is it significant for UK businesses?

A: Agentic AI refers to systems that take action beyond merely answering questions. 89% of UK respondents are investing in it, aiming for a hybrid human and digital workforce, as noted by Paul Henninger of KPMG.