Executive summary
European companies are set to increase their spending on generative AI over the next year, but are approaching this transformative technology with more caution than their North American counterparts
In the past year, generative artificial intelligence (AI) has evolved from interesting new toy to valuable business tool. Solutions such as ChatGPT, DALL-E, Microsoft Copilot, and Midjourney have proven to be accessible to users and quick to deliver benefits.
Although European businesses have been slower to adopt and realize value from generative AI than North American firms, both regions share a similar optimism about the technology’s benefits and confidence about its future.
This is driving significant investments in generative AI, our survey of 1,000 business executives across Europe revealed.
We estimate that companies in the 11 European countries we surveyed spent $1.3 billion on generative AI initiatives in the past 12 months. This is expected to increase by 115%, to $2.8 billion, in 2024. While this growth is faster than that forecast for North America (69%), Europe will still spend half as much in absolute terms, and 9% less as a proportion of GDP, by this time next year.
This lower spending has slowed progress in generative AI deployment. Most European companies are still experimenting with or implementing generative AI, but only 6% report delivering business value from their initiatives, compared to 16% in North America.
European companies are also more focused on ethics, bias, and fairness challenges than those in North America. We believe Europe’s General Data Protection Regulation (GDPR), as well as the EU AI Act, have driven this higher level of awareness. In turn, this could explain much of the reason Europe is lagging behind North America in investment and deployment.
The upside is that working within this regulatory framework has made European companies less concerned about data usability and more confident they can manage and control generative AI systems compared to North American companies.
Generative AI Radar: Europe
Boards of directors in Europe are much more likely to be the primary sponsors of generative AI initiatives than in North America. They are also more involved in setting regulations and policies, which shows an alignment between investment and innovation not often seen when it comes to technology.
Ultimately, European companies are overwhelmingly positive about the impact of generative AI on their business.
Moreover, their confidence in managing and controlling generative AI systems also translates into confidence in acquiring and developing skill. European companies are more likely to train, reskill, and recruit in-house rather than rely on partners compared to North American companies.
To move forward more quickly, European companies need to accelerate their experimentation with generative AI to deliver more valuable use cases. But they should not lose sight of responsible AI practices, nor ignore the need to build an AI-first operating model to fully realize the value of this transformative technology.
