Brussels Pushes for AI Growth Amidst European Lag

European Businesses Lag in AI Adoption; Brussels Seeks to Accelerate Uptake

Despite Europe's strong foundation in artificial intelligence (AI) research and innovation, European businesses currently exhibit low levels of AI adoption compared to their global counterparts, particularly firms in the United States. As of 2025, Brussels is actively pushing initiatives to close this gap and boost AI integration in the European economy to maintain competitiveness in the global digital landscape.

Current State of AI Adoption in Europe vs. Global Leaders

Recent data reveals a stark contrast in AI usage between European and American businesses. According to a 2025 European Parliament briefing, only about 27% of local and regional public administrations in the EU have adopted AI or generative AI solutions, while small businesses show even lower adoption rates. By contrast, a report from the US Chamber of Commerce highlights that 58% of small businesses in the United States are using generative AI. This disparity extends beyond public sectors into private enterprises, where European AI uptake remains modest.

The overall AI adoption landscape globally is growing fast; 78% of organizations worldwide utilize AI in at least one business function, signaling AI's transition from experimental to operational status. However, Europe is not keeping pace with this trend, which threatens its position in the rapidly evolving digital economy.

Strengths and Challenges of the European AI Ecosystem

Europe is recognized as a world leader in AI research excellence. It produces a substantial share of AI scientific publications and houses prestigious AI research centers such as the German Research Center for AI (DFKI) and France’s INRIA. Projects like the Jupiter exascale computer and networks like ELLIS underscore Europe's commitment to advancing AI science, technical innovation, and understanding societal impacts.

Moreover, Europe is a major player in robotics, ranking as the second-largest robotics market globally after China and supplying robotic technologies worldwide. Nevertheless, Europe struggles to translate its strong research base into globally competitive AI firms. Many European startups and scaleups relocate to the United States to access venture capital and computational resources, while top AI talents often pursue graduate studies abroad, particularly in the U.S., where AI ecosystems are more mature.

Brussels’ Strategy to Increase AI Uptake in Business

The European Commission and Parliament have recognized the low AI adoption as a critical vulnerability. To address this, Brussels is promoting a multi-pronged strategy focusing on:

• Facilitating access to AI technologies and infrastructure for small and medium-sized enterprises (SMEs), which make up a large portion of the European economy but lack the resources to invest heavily in AI.
• Promoting AI skills and education to reduce the talent drain and equip the workforce with digital competencies essential for AI integration.
• Creating a harmonized regulatory framework that balances innovation with ethical considerations, as fragmented digital laws across member states currently create compliance challenges for businesses.
• Supporting AI commercialization and scale-up by encouraging investment in European AI startups and fostering public-private partnerships.

Italy’s recent move to establish the first national AI rules in Europe exemplifies efforts to build regulatory clarity that can encourage AI adoption while protecting citizens.

Economic and Competitive Implications

AI adoption is a critical driver of productivity and innovation. The Federal Reserve’s October 2025 report on AI competition in advanced economies underscores that countries leading in AI adoption are likely to achieve faster economic growth and stronger global competitiveness. With the EU’s R&D investment concentrated in large firms, smaller businesses risk being left behind, exacerbating economic disparities.

Furthermore, while AI adoption is soaring worldwide, many companies still do not rigorously measure AI’s impact on sustainability and efficiency, a gap that European firms could address to gain competitive advantage.

Outlook and Challenges Ahead

The European AI adoption landscape in late 2025 is characterized by:

• Uneven AI uptake across sectors and countries within Europe, with the information sector adopting AI more rapidly than others.
• Strong research and innovation capacity but insufficient commercialization and diffusion of AI technologies among businesses.
• Growing policy momentum from Brussels and member states to overcome barriers related to infrastructure, skills, funding, and regulation.

Despite these efforts, Europe faces a race against global AI leaders, particularly the U.S. and China, where AI ecosystems are more mature and integrated into business processes at scale. The coming years will be pivotal in determining whether Europe can transform its AI research excellence into widespread business adoption and economic growth.

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Europe’s efforts to foster AI uptake reflect a strategic imperative to remain competitive in an AI-driven global economy while ensuring ethical and sustainable development of these transformative technologies.