Euro-area firms lean on cash for AI investment

A European Central Bank survey of 5,087 euro-area companies found that 72% of firms planning AI investment expect to rely on internal funds, including cash flow and retained earnings. Bank loans and grants were each cited by 16%, leasing by 15%, private equity or venture capital by 6%, and debt securities by just 1%.

The SAFE survey asked companies how they expected to finance AI investment over the next 12 months. Another 18% did not select any financing option, indicating that some firms have not yet settled on how they will pay for planned AI initiatives.

Planned spending extends beyond computing hardware. Some 49% of firms expect to invest in AI technologies and tools, 46% in employee training, 40% in data and infrastructure, and only 12% in hiring AI specialists.

The ECB has warned that reliance on internal cash could slow AI adoption by limiting investment to what businesses can generate themselves. That constraint may be sharper for smaller or fast-growing companies, particularly as Europe continues to face a shallower venture-capital market than the U.S.