Government Initiatives and Investments to Support Adoption of AI Fuels Europe Artificial Intelligence Market Growth
According to our latest study, "Europe Artificial Intelligence Market Size and Forecast (2021–2031), Regional Share, Trend, and Growth Opportunity Analysis – by Component, Organization Size, Industry Vertical, and Country," the market was valued at US$ 42.64 billion in 2023 and is expected to reach US$ 545.48 billion by 2031; it is estimated to record a CAGR of 37.5% from 2023 to 2031. The report includes growth prospects owing to the current Europe artificial intelligence market trends and their foreseeable impact during the forecast period.
Government initiatives toward the adoption of AI technology are driving the Europe artificial intelligence market. For instance, in January 2024, the European Commission (EU) announced the AI innovation package, which contains numerous initiatives to help entrepreneurs and SMEs in the region create trustworthy AI that adheres to EU principles and standards. EU also set the main GenAI4EU initiative that aims to increase the adoption of generative AI across its key strategic industrial ecosystems. The initiative encourages the development of large open innovation ecosystems that foster collaborations between AI startups and deployers in the industrial and public sectors. Moreover, government and private organizations are increasingly investing in raising AI adoption in Europe. According to the European Parliamentary Research Service of March 2024, the EU and the UK attracted €9 billion (~US$ 9.35 billion) in private investment in AI technology. EU-based AI firms observed an investment of ~€32.5 billion (US$ 33.78 billion) from 2018 to the third quarter of 2023. These investments provide support to AI companies to assist them in developing and upgrading their AI solutions to expand their customer base in Europe. Similarly, the EU's Digital Europe program offers a total of €2.1 billion (approximately US$ 2.18 billion) in funding for AI-related projects during 2021–2027.
Europe Artificial Intelligence Market Analysis (%) – by Component, 2023 and 2031
Europe Artificial Intelligence Market Size and Forecast (2021–2031), Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Component (Software, Hardware, and Services), Organization Size (Large Enterprises and SMEs), Industry Vertical (IT and Telecom, BFSI, Healthcare, Manufacturing, Retail and E-Commerce, Automotive, and Others), and Country
Europe Artificial Intelligence Market Forecast (2024-2031)
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Source: The Insight Partners Analysis
Numerous tech and consulting companies, including Accenture Plc, Contents SpA, Aleph Alpha GmbH, and Mistral AI, are making significant investments in AI technology. In June 2023, Accenture Plc announced an investment of US$ 3 billion to accelerate the development of new AI-based solutions. The company is planning to use these solutions to help businesses from across 19 industries. These investments are also made to develop and implement AI technology in various processes to manage a high volume of data. Thus, various initiatives and investments by governments and private organizations to support the adoption of AI boost the Europe artificial intelligence market growth.
Accenture Plc, Advanced Micro Devices Inc, Google LLC, International Business Machines Corp, Intel Corp, Microsoft Corp, NVIDIA Corp, Amazon Web Services Inc, SAP SE, and SAS Institute Inc are among the key players profiled in the Europe artificial intelligence market report. Several other major players were also studied and analyzed during the market study to get a holistic view of the market and its ecosystem.
The report includes the Europe artificial intelligence market forecast by component, organization size, and industry vertical. Based on component, the market is divided into hardware, software, and services. In terms of revenue, the software segment held the largest Europe artificial intelligence market share, and it is expected to record the highest CAGR during the forecast period.
The scope of the Europe artificial intelligence market report focuses on Spain, the UK, Germany, France, Italy, and the Rest of Europe. In terms of revenue, the UK held the largest Europe artificial intelligence market share. According to data from the Bank of England from November 2024, 75% of businesses in the UK have already employed AI in their operations, while another 10% of businesses are planning to adopt it within the next 3 years. These stats indicate an increase from the source's 2022 study, which found that 58% of businesses were utilizing AI, and an additional 14% had plans of utilizing it. AI-based solutions enable businesses to automate data management processes by eliminating inconsistencies and duplication. According to GOV.UK data of November 2024, approximately 524 enterprises in the UK have deployed AI, which employs over 12,000 people and generates more than £1 billion (~US$ 1.04 billion) to be invested in the adoption of AI technology. These enterprises provide customers with the tools they need to build or deploy AI responsibly. The increased demand for AI encourages market players to develop AI infrastructure and advance AI software to meet their customer's demands. In June 2024, Salesforce, Inc. chose London for building its first AI center. The center will stimulate collaboration by bringing together industry experts, partners, and customers to accelerate AI innovation while providing crucial skill development opportunities. Hence, the rising awareness and significant benefits provided by AI solutions would create further opportunities for the artificial intelligence market in the UK during the forecast period.
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