Why EU business AI adoption is rising and still not catching up

About 20% of European Union enterprises with at least ten employees use artificial intelligence in some business function, up from 13.5% the prior year. Adoption rates differ sharply across countries, ranging from around 42% in Copenhagen to about 5% in Bucharest, so the overall average hides major gaps. Regulatory concerns such as the AI Act are cited as a reason Europe lags the United States, but the underlying issue is broader: European tech has remained small for years, with capital not flowing and skills remaining scarce. Many European firms that buy AI still rely on American cloud providers. OECD figures cited by Christine Lagarde show most AI venture capital in 2025 went to the United States, while the European Union attracted far less.

"They were saying that 20% of European Union enterprises with at least ten employees now used artificial intelligence in some part of their business, up from 13.5 per cent the year before. A jump of six and a half percentage points in twelve months. In Brussels, the number was greeted with quiet relief. In a Berlin think tank, an economist forwarded it to a colleague with a one-word comment: "finally.""

"That spread, from Copenhagen at 42 per cent down to Bucharest at five, is where any honest editorial about European AI adoption has to begin. The continent has not been standing still. It has been moving fast, in places, and not moving at all, in others. The aggregate twenty-per-cent number flatters and obscures in equal measure. It is the average of an economy that, on this question, no longer behaves like a single market."

"The standard explanation for why Europe trails the United States on enterprise AI is regulatory. It is the AI Act, runs the line, that has spooked boards and tied up legal departments. There is something to that, but not as much as the lobbyists would like. The deeper story is that European AI adoption is low for the same reasons European tech has been small for twenty years. Capital does not flow; skills are scarce."

"Start with the capital. According to figures the OECD released in February and which Christine Lagarde cited in a speech to the European Parliament in November, roughly three-quarters of all AI venture capital in 2025 went to firms in the United States, totalling around $194 billion. The European Union, taken together, attracted $15.8 billion. That is not a gap. That is two different orders of magnitude."

Read at TNW | Eu