The Mayor of London has unveiled a £12 million investment aimed at helping small businesses adopt artificial intelligence and unlock new opportunities for growth.
The programme will invest £4 million a year over the next three years, providing practical support to help businesses use AI to improve productivity and build workforce skills.
The announcement comes as businesses face growing pressure to keep pace with rapidly advancing technology, despite relatively low levels of AI adoption in small businesses.
According to City Hall, fewer than one in six small businesses currently use AI tools.
Mayor of London Sadiq Khan said the technology presents a major opportunity across the capital.
"We want every business to benefit from the opportunities AI can unlock," the mayor said.
"This investment will help thousands of SMEs adopt new technologies, boost productivity, create better jobs and drive growth across the capital.
"By backing businesses to innovate and equipping Londoners with the skills they need for the future, we can help build a fairer, more prosperous city for everyone."
The funding will support businesses looking to integrate AI into their day-to-day operations, helping them work more efficiently, develop new capabilities and strengthen their competitiveness.
The move has been welcomed by leaders in the technology sector, who argue that AI has the potential to be transformative for small businesses.
But many business owners remain uncertain about how to use the technology effectively, while concerns and misconceptions about AI continue to act as barriers to adoption.
According to government figures, the vast majority of businesses (80%) neither use or have plans to use AI.
Around one in six (16%) are currently using at least one AI technology and only 5% have plans to adopt AI in the future.
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While many businesses say they lack clear AI use cases or in-house expertise, ethical concerns were reported to be the biggest obstacle to the adoption of artificial intelligence.
High costs and uncertainty over regulation were also major deterrents.
Claire Woods, founder of marketing agency Kennedy Woods said: "AI has the potential to be a game changer for SMEs, however I think there's still a lot of misinformation going around which is supporting the fear factor i.e. AI is taking over the world!
“Many business owners know they should be paying attention to AI, but they're not always sure how to integrate it within their business processes.
“The biggest opportunity in my opinion right now is education - we need to help people to have a clear understanding on how to use these tools effectively.
“What worries me most is seeing businesses adopt AI simply because everyone else is doing it. AI isn't the strategy; it's merely the tool.
“The real value with AI comes from having a clear plan for how it can help improve productivity, streamline processes and create more time to focus on growing the business."