Europe’s AI uptake boosts investment but exposes funding gaps

AI is supporting euro area growth through business investment and European participation in the global technology supply chain. Firms in the ECB Corporate Telephone Survey report that AI has added about 10 per cent to their capital expenditure plans this year. Digital investment remains concentrated in intangible assets, with data centres representing a relatively small share.

Adoption is widespread but generally limited in intensity. In the fourth quarter of 2025, 64 per cent of firms surveyed reported experimental or moderate AI use, while only 7 per cent described their use as significant. Improving business processes was the leading motivation, ahead of innovation and product development. Just 15 per cent cited reducing labour costs.

Workplace use has also expanded: 52 per cent of workers report using AI, compared with 26 per cent in 2024. The median working user reports saving three hours per week. Younger and more educated workers show higher adoption, and employment expectations are broadly positive. Training needs, reliability concerns and limited interest remain barriers.

Internal funds remain the main financing source, while external lenders favour hardware and infrastructure that can serve as collateral. That pattern suggests a potential funding gap for intangible investments essential to long-term capabilities. Europe’s reliance on debt also makes AI innovation more sensitive to monetary policy. Rising cybersecurity threats add operational risks for banks, while the timing and scale of economy-wide productivity gains remain uncertain.