Cybersecurity pips AI to become top UK tech investment for 2026

As the hype around artificial intelligence continues into a fourth year, a growing number of UK executives believe the technology is about to yield returns on investment, according to a study from KPMG. However, as new threats emerge, and large companies find themselves rocked by high-profile hacks, cybersecurity is actually set to see the largest budget increases in investment over the next 12 months.

2026 is seeing a landmark shift in investment priorities in the UK. After years of pressure to get onboard the ‘revolutionary’ technology of AI, results remain muted at best. While a previous MIT study found fewer than one-in-ten firms investing in AI had enjoyed a return on investment, another recent PwC analysis further showed that 56% of CEOs now believe they have seen “no benefit” from funnelling funds into technology.

At the same time, ongoing geopolitical tensions, headline grabbing cyber-attacks on global corporations, and the gaps in defence that harried AI-transformations have left mean that cyber security is top of every agenda. As a result, a new poll of 151 UK business leaders suggests cybersecurity, not AI, is now the leading priority for large-scale increased investment over the coming 12 months.

As part of the annual KPMG Global Tech Report 2026, which gains insight on priorities from tech executives across the world, the firm found that 57% of UK companies reported they are planning on increasing their budget for cyber security by more than 10% over the year. That is far ahead of the same increase for AI, which just 46% said they had sanctioned. Meanwhile, the global average increasing cyber security by more than 10% was 41% – signalling greater emphasis on cyber security in the UK.

Paul Henninger, head of technology and data at KPMG, commented, “AI may be dominating boardroom agendas, but our findings show UK organisations are putting real money behind cyber resilience. That’s a sensible shift: with more than four in five expecting to raise investment in AI, cyber and data, the range of threats grow as fast as innovation. The message is clear: don’t buy cyber tools for the sake of it – start with your most critical assets, fix the basics, and assign clear accountability. The organisations that win will treat cyber as an enabler of growth, embedding security into cloud and AI from day one and turning budget into measurable operational resilience.”

Beyond the top levels of investment, however, the picture remains unchanged for any level of increase. AI sees 84% of respondents reporting at least some level of increase in AI investment, ahead of 83% focusing on cybersecurity in this way. Globally, this may be because maturity is further along at a larger number of firms for cyber security – with 18% having fully scaled it – while the newer topics of AI and automation only have a fully-scaled portion of 10%.

This may also be why, even in the face of a number of negative findings from respected researchers, the vast majority of respondents still hold out hope that their AI investments are going to start paying off. In the global study, KPMG found that 68% of executives believe they will be innovating and deploying AI use cases across their business in 2026, delivering “ROI across multiple use cases”.

In the UK, an even more optimistic 91% told researchers that they think AI will shift from an efficiency enabler to a revenue-driving innovation in 2026.  signalling a shift away from initial applications and trials of the technology into seeing it deliver value and a return on investment. In part, this is driven by ‘Agentic AI’, which has increasingly been touted as the future of the technology, with 89% of UK respondents saying they are already investing in building agentic AI into their systems as they plan to move to a hybrid of human and digital workforce – while 90% also agreed that their hiring plans include specialist AI roles such as prompt engineers, AI ethicists and machine learning operations specialists.

Henninger added, “Agentic AI marks a shift from tools that answer questions to systems that take action. It’s no surprise that so many organisations are already investing at pace, but the real differentiator will be governance and talent. When AI agents can trigger workflows, access data and interact with customers, you need clear guardrails—identity and access controls, audit trails, human oversight and continuous monitoring for cyber and other risks. Pair that with targeted hiring and broad upskilling, and you can unlock the productivity and return on investment without compromising reliability or trust at scale.”