Over Half of UK SMEs Use AI Despite High Error Rates

More than half of UK SME owners confirmed this week that they regularly use AI tools to support business decisions, despite 45% of the outputs containing significant errors. This high rate of hallucinated advice exposes small businesses to severe legal liability under the UK's newly active Data (Use and Access) Act. One recent study of 3,000 AI responses found 20% contained major fabrications.

45% of AI business advice contains significant errors

According to a March 2026 report from Dealer Support, the majority of UK small and medium-sized enterprise owners are now relying on AI to guide their commercial strategies. But the underlying data quality is alarming. A recent study evaluating over 3,000 AI-generated responses found that nearly half contained at least one major issue.

Around one in three outputs included missing or misleading attributions. Worse, 20% of the AI responses contained major errors, including entirely fabricated or outdated information. The report highlighted