The digital divide continues to grow: advanced adoption stalls
Europe’s adoption of artificial intelligence (AI) continues to increase. This year’s research finds that 54% of businesses across Europe have adopted AI, up from 42% last year. That is a 29% year-on-year growth of AI adoption from last year (a slight increase on the 27% of growth in the previous year). This confirms that AI is now firmly moving into the mainstream of European business activity, driving growth and productivity – recent research has estimated that as much as 75% of the difference in incomes between countries can be explained by the differences in the rate of adoption of productivity-enhancing technologies.
The data shows that while adoption across Europe is broad, progress towards advanced use cases remains slow. In this sense, business adoption lags the full innovation potential of AI.
The 22% of businesses harnessing AI’s most advanced use cases for transformative change is an increase of over 1 million businesses from the previous year. However, businesses must move more quickly towards advanced adoption to keep pace with technology innovation. This much slower year-on-year increase in advanced adoption is true for businesses of all sizes – SMEs see 54% AI adoption, but only 21% are integrating AI’s most advanced uses.
Basic adoption
58% of business adopters remain in the early stage (compared to 61% last year), using AI primarily for incremental improvements such as efficiency gains and process streamlining rather than for innovation (such as relying on publicly available chatbots for routine tasks or purchasing ready-made AI solutions). This is matched by 59% of SMEs (which make up 99% of all businesses in the EU and heavily shape overall averages).
Transformation begins
17% of businesses have advanced to the intermediate stage of adoption (consistent with 18% last year), where AI is integrated across multiple business functions. These firms are reporting that they are using AI to improve products and services that they are offering to their customers or to drive operational efficiency.
Advanced adoption & strategic reinvention with AI
22% of businesses have reached the most advanced and transformative stage of AI maturity, falling slightly to 21% of SMEs. These firms are using sophisticated systems, combining multiple models, developing custom AI solutions, or using agentic and autonomous AI. At this stage, businesses are rapidly innovating with AI and, in turn, disrupting their industry. This figure has increased only marginally from 21% of AI adopters last year.
However, mainstream adoption alone is no longer the defining challenge. The moment Europe now faces is about keeping pace with accelerating technological change and innovation. Past waves of digital transformation, such as the shift from dial-up internet to widespread mobile connectivity, unfolded over years and even decades.
Today, AI and cloud technologies are compressing that cycle dramatically. Agentic AI represents a step change: systems that can autonomously plan, execute, and optimise complex tasks across workflows. In this context, speed becomes a decisive advantage: businesses that use AI well are harnessing the technology to test ideas, build products, and improve operations much faster. As the technology continues to advance rapidly, those that fail to embed it beyond basic use cases risk being left behind.
As a result, the core question is no longer whether businesses are adopting AI, but whether they can translate usage into meaningful impact quickly enough and at scale.
Many organisations remain concentrated in basic deployment of AI (efficiency gains and streamlining) rather than harnessing the full potential of the technology.
Looking deeper at how businesses are using AI today, there are three distinct stages of AI maturity:
At the same time, evidence suggests that innovation timelines are already being reshaped by AI:
76% of AI adopters say their innovation timeline has accelerated over the past two years, and 75% of businesses anticipate that AI will accelerate innovation timelines further.
Businesses report that AI is the leading driver of this shift (43%), closely followed by increasing competitive pressure (42%).
Among startups, the effect is even more pronounced: 91% report accelerated innovation timelines. These businesses are retaining their position from 2025 as the clear frontier firms in advanced AI adoption. 89% of the startups reporting this accelerated innovation say they are experiencing productivity gains and almost all (97%) expect AI adoption to increase their growth in the next year.
Scale AI effectively across their organisation
Embed it into core operations and decision-making
Move quickly from experimentation to real-world impact
This matters because the next phase of competitiveness and growth will not be defined by whether businesses have tried AI. It will be defined by whether they can:
Those that have progressed to AI’s most advanced uses are demonstrating what good looks like. These businesses are not simply using AI tools for basic efficiency tasks – they are building the workforce capabilities and internal structures required to deploy AI safely and at scale. They are setting out clear pathways for structuring data and governance around responsible usage. These organisations are far more likely to have dedicated AI teams or leadership accountability, a clear AI strategy and roadmap, and the ability to hire and retain specialised talent across data, engineering, and governance.
Only 31% of businesses report having a formal and comprehensive AI strategy, while a further 28% say this is still in development – this has slightly decreased from the previous year, when 35% of businesses reported having a formal and comprehensive AI strategy. More businesses require support in developing a strategy to guide their adoption, as the technology becomes more sophisticated and the potential use-cases become more business critical. Furthermore, businesses must be supported to put responsible AI at the heart of their adoption – a quarter (24%) already have a responsible AI strategy or framework in place, while 31% plan to develop one in the next year.
Thinking strategically and responsibly from the outset about how to develop and integrate AI is key. Businesses are looking for support and guidance in this - of those who use external providers to support their AI adoption, nearly half (49%) use them to support AI strategy development and road mapping. To progress to advanced adoption, businesses require further support in developing a deliberate, thoughtful strategy that prioritises both innovation and responsibility.
Skills development remains critical. 81% of businesses estimate that AI skills will be important in their industry in the next five years.
Businesses which successfully harness AI typically invest more consistently in employee training and AI literacy and are better positioned to move beyond experimentation because they have the skills and capacity to integrate AI into real workflows. Those citing skills shortages are less likely to be advanced adopters (16% vs 27%).[1] In other words, the gap between basic and advanced adoption is increasingly a skills and capability gap, not just a technology gap.
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Marta Sjögren
co-CEO
Paebbl