European AI Investment Set to Reach $133 Billion by 2028

According to the latest report from IDC, Worldwide AI and Generative AI Spending Guide, investments in artificial intelligence (AI) in Europe are projected to reach $133 billion by 2028, with a compound annual growth rate (CAGR) of 30.3% between 2024 and 2028. This substantial growth underscores the transformative impact of AI and highlights the increasing need for specialized skills, particularly in the context of generative AI.

As a consultancy specializing in data science and artificial intelligence, we are keenly aware of this trend and the growing role AI plays across various industries. IDC points out that the accelerated adoption of generative AI is one of the key factors driving this growth. Carla La Croce, Research Manager in Data and Analytics at IDC, states that generative AI is rapidly evolving from initial testing and experimentation into more integrated business solutions, with an expected CAGR of 55%—significantly higher than that of more established AI technologies.

Investment Trends in AI: Key Insights

IDC's report identifies several relevant investment trends that highlight the areas and sectors where AI is gaining traction:

1. Investment in Expertise and Consulting:

Approximately 40% of European companies are focusing on generative AI, with plans to intensify investments in training, software enhanced by generative AI, and consulting services over the next 18 months. The demand for expertise in this area is growing, and companies with specialized AI consulting services stand to benefit from this trend.

2. Software-Led Growth:

Software will be the primary recipient of AI spending, accounting for around 58% of total investments. While applications and platforms will initially dominate, by 2028, AI platforms will become essential, enabling companies to develop customized solutions to meet the growing demand for personalized products and experiences.

3. Leading Sectors:

The financial sector, particularly banking, is expected to lead AI investment, accounting for over 23% of total AI spending. Other key sectors with significant growth potential include retail and software/information services, highlighting how AI is transforming multiple industries.

However, the report notes that European investment in AI infrastructure (Infrastructure-as-a-Service, servers, and storage) may be lower compared to the United States, as major infrastructure providers are located outside Europe.

The Role of AI Consulting in the Current Landscape

With the rapid growth and complexity of AI investments, companies that leverage the support of specialized data science and AI consultancies are well-positioned to navigate the opportunities and challenges arising from the use of these technologies. In our consultancy, we focus on providing customized AI solutions designed to meet specific needs and adapt to the digital transformations that industries are experiencing.

As AI becomes increasingly ubiquitous, it is essential to implement strategies that enable effective and sustainable adoption of these technologies. From developing AI models to providing implementation consulting and training, we help organizations maximize their return on AI investments, promoting more informed decision-making and organizational resilience.

Conclusion

With projections of rapid growth in AI investments across Europe and the critical role of generative AI in this context, companies must consider how implementing AI solutions can influence their competitiveness and innovation. In our consultancy, we are committed to helping organizations adopt and optimize the use of AI, aligning each solution with the strategic needs and objectives of our clients.

Stay tuned for more insights on the impact of AI on European businesses and the solutions that can help transform industries in an increasingly data- and AI-driven landscape.

Source: IDC, Worldwide AI and Generative AI Spending Guide