Accelerating spending
While European companies are generally cautious, there are some striking differences between individual countries and regions
Generative AI Radar: Europe
Infosys surveyed 1,000 executives in the UK, France, and Germany, as well as the Benelux (Belgium, the Netherlands, and Luxembourg) and Nordic regions, and found that companies expect to more than double their investment in generative AI during the next year. Adjusting for differences in the size of industry samples in the survey and the number of companies in each industry, we estimate spending on generative AI in this region to reach $2.8 billion by the end of 2024 — 115% higher than the $1.3 billion spent in 2023.
This is half the amount we expect North American companies to spend. In October 2023, we published an estimate of $5.6 billion in spending in that region for 2024. As a proportion of gross domestic product (GDP), Europe spent 0.009% on generative AI, which is 31% less than North America’s 0.013% (Figure 1).
Figure 1. European companies spending less than North America, now and next year
Source: Infosys Knowledge Institute
Despite a cautious start compared to their North American counterparts, we found that almost all European respondents (88% ) are looking to increase their spending next year. In 2023, most spent less than $1 million on generative AI initiatives, with a fifth spending nothing at all. In 2024, however, 62% expect to spend over $1 million, with almost 17% planning to spend more than $5 million. This compares with 26.6% and 4.9% spending the same amounts respectively in 2023 (Figure 2).
Figure 2. Large companies more likely to report business value from generative AI initiatives
There are significant differences in generative AI investment levels by country surveyed, with France clearly leading in both past and future spending.
We estimate that French companies spent $352 million on generative AI initiatives in 2023. This is 20% more than Germany ($294 million), and 56% more than Benelux ($226 million).
France’s lead is likely a reflection of its vibrant AI startup scene, and the French government’s investment in this sector. In 2021, it was reported that France would invest €2.2 billion in AI by 2025, much of this in talent development and education. In June 2023, President Emmanuel Macron announced €500 million of new funding to support “AI champions.” That same month, Mistral AI, a French generative AI startup, raised €105 million in first-round funding, and in September, French billionaire Xavier Niel announced €200 million to build a Paris-based AI research center and cloud supercomputer.
We expect France to maintain its lead in 2024, with Germany keeping pace behind. Spending in both countries is expected to grow by 107% in the next 12 months.
UK spending trailed Benelux in 2023 but should catch up in 2024, putting the UK in third place behind Germany. However, UK company spending is still anticipated to be 43% less than France in 2024 (Figure 3).
Figure 3. France and Germany lead generative AI spending
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