Europe Artificial Intelligence Market Growth, Size, Share, Trends, Key Players Analysis, and Forecast till 2031

The Europe artificial intelligence market size was valued at US$ 42.64 billion in 2023 and is projected to reach US$ 545.48 billion by 2031; it is estimated to record a CAGR of 37.5% from 2023 to 2031. Rise in the adoption of offshore and nearshore customer care BPO outsourcing is likely to remain a key market trend in the coming years.

Europe Artificial Intelligence Market Analysis

The rise in adoption across various industries, government initiatives and investments to support the adoption of AI technology, and the burgeoning demand for multimodal AI are a few of the significant factors driving the Europe artificial intelligence market. Furthermore, increasing investments in industrial automation solutions and the growing popularity of agentic Al are likely to propel the demand for artificial intelligence in Europe in the future. Technological advancements and integration of advanced technologies such as machine learning, natural language processing (NLP), and robotic process automation (RPA); demand for generative Al; and development of explainable AI (XAI) and AI-powered cybersecurity solutions that reduce operating costs are expected to create opportunities for the market growth during the forecast period. An upsurge in the need for customized AI-based solutions, manufacturers' focus on developing small language models and open source advancements, and an increase in research and development activities also benefit the Europe artificial intelligence market.

Europe Artificial Intelligence Market Overview

Artificial intelligence (AI) operates as a combination of technologies that allow computers to perform a wide range of advanced operations, such as reading, understanding, and translating spoken and written language; analyzing data; making suggestions; and so on. AI serves as the basis of current innovations in computing, creating value for both individuals and enterprises. For example, optical character recognition (OCR) uses artificial intelligence to extract text and data from photos and documents, transforming unstructured content into business-ready structured data and providing crucial insights. Industries highly use AI-based systems and software in a variety of applications, including speech recognition, image recognition, translation, predictive modeling, data analytics, and cybersecurity. Moreover, significant benefits offered by AI include 24 × 7 availability, repetitive task automation, fewer human errors, more and faster data insights, reduced physical risks, and enhanced decision-making.

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Europe Artificial Intelligence Market: Strategic Insights

Europe Artificial Intelligence Market

• Market Size 2023
  US$ 42.64 Billion
• Market Size 2031
  US$ 545.48 Billion

Market Dynamics

GROWTH DRIVERS

• Rising Adoption in Various Industries
• Government Initiatives and Investments to Support Adoption of AI
• Growing Demand for Multimodal Al

FUTURE TRENDS

• Burgeoning Popularity of Agentic Al

OPPORTUNITIES

• Demand for Generative Al

Regional Overview

• Europe

Market Segmentation

Component

• Software
• Hardware
• Services

Organization Size

• Large Enterprises
• SMEs

Industry Vertical

• IT and Telecom
• BFSI
• Healthcare
• Manufacturing
• Retail and E-Commerce
• Automotive

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Europe Artificial Intelligence Market Drivers and Opportunities

Rising Adoption in Various Industries Propels Market Growth

Artificial intelligence is used for various purposes across industries such as healthcare, retail and e-commerce, and manufacturing. These industries use AI technology to automate repetitive tasks, enhance accuracy, and accelerate job completion. As a result, it allows staff members to focus on more complex activities alongside increasing their efficiency and production outputs. Artificial intelligence is transforming the healthcare sector by improving diagnostics, personalizing treatment regimens, streamlining processes, and lowering costs. Healthcare organizations are using image-based AI models as diagnostic tools, which can speed up interpretation and lead to early disease identification. For instance, in September 2023, Paige AI, Inc. collaborated with Microsoft to develop the world's largest image-based AI models for digital pathology and oncology to fight cancer. The companies are engaged in developing a new AI model that is larger than any other image-based AI model existing today. Configured with billions of parameters, this model would assist in capturing the subtle complexities of cancer and serve as the foundation of next-generation clinical applications as well as computational biomarkers, pushing the boundaries of oncology and pathology. Further, as stated in July 2024, the European Academies Science Advisory Council (EASAC) and the Federation of European Academies of Medicine (FEAM) are jointly working on projects and case studies to evaluate AI-incorporated healthcare products and services. Hence, a growing number of research and development activities related to the use of AI in the healthcare industry are fueling the market.

Demand for Generative Al to Create Growth Opportunities

Generative AI plays an essential part in advancing Europe's businesses. With the ability to generate text, images, music, and code, industries ranging from healthcare and finance to entertainment and manufacturing are expected to create significant growth opportunities for the artificial intelligence market in the region. It enables firms to function more efficiently and stay ahead of their competitors. Governments of European countries are organizing various events to create awareness related to the benefits provided by generative AI. IQPC organized its second Annual Generative AI Europe 2024 seminar, which aimed to bring together the European community to exchange knowledge and expertise on implementing generative AI in enterprises. This seminar was meant to support participants in understanding and overcoming present technology constraints, data models, and small and big language models. The seminar also demonstrated ways to democratize generative AI in organizations, manage operation changes, maintain content safety and compliance, support businesses to reduce production costs, and render the technology suitable for real-world applications.

According to data released by Infosys Limited in December 2023, numerous countries in Europe are making significant investments in generative AI technology to streamline and automate operations, enhance product development, and optimize customer experiences. France and Germany doubled their GenAI spending to approximately US$ 730 million and US$ 610 million, respectively, between 2022 and 2023. In both countries, ~50% of businesses have either deployed generative AI or have implemented and achieved business value from it. Similarly, roughly 40% of companies in the UK, Benelux, and Nordics invest in AI technology to improve their business operations. In December 2023, the UK is anticipated to surpass Benelux to take third place, as its spending is likely to increase two-fold or more to reach approximately US$ 510 million. In 2023, companies in Nordic countries have invested more than 2.5 times their present spending, totaling more than US$ 470 million in GenAI. Hence, the development of generative AI tools and models for effectively managing business processes is creating opportunities in the Europe artificial intelligence market.

Europe Artificial Intelligence Market Report Segmentation Analysis

Key segments that contributed to the derivation of the Europe artificial intelligence market analysis are component, organization size, and industry vertical.

• Based on component, the market is divided into hardware, software, and services. The software segment dominated the market in 2023.
• The market for the software segment is subsegmented into cloud-based and on-premise. The cloud-based segment dominated the market in 2023.
• In terms of organization size, the Europe artificial intelligence market is categorized into large enterprises and SMEs. The large enterprises segment dominated the market in 2023.
• On the basis of industry vertical, the market is segmented into automotive, healthcare, manufacturing, retail and e-commerce, IT and telecom, BFSI, and others. The IT and telecom segment dominated the market in 2023.

Europe Artificial Intelligence Market Share Analysis by Geography

• The Europe artificial intelligence market is segmented into Germany, France, the UK, Italy, Russia, and the Rest of Europe. There is a high demand for AI and machine learning software development services in European countries; this can be attributed to the rising awareness of the potential of AI and machine learning, a severe shortage of skilled workforce, and the desire of many businesses and governments to take advantage of AI technologies. According to data published by the Center for the Promotion of Imports (CBI), which is part of the Netherlands Enterprise Agency, in June 2023, only 8% of European firms used AI technology in 2021, and the share doubled in January 2023. Similarly, in 2022, the launch of ChatGPT increased the use of AI technology in Europe; around 75% of European businesses were utilizing AI technology in 2023.

Europe Artificial Intelligence Market Report Scope

Europe Artificial Intelligence Market News and Recent Developments

The Europe artificial intelligence market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the Europe artificial intelligence market are listed below:

• IBM entered into a collaboration Janes with an aim to integrate open-source defense and security intelligence data into a trusted AI and data platform—IBM's watsonx. This collaboration will build the foundation to enable defense leaders' access to high-quality data infused with trusted AI to improve their decision-making by integrating the IBM watsonx AI and data platform utilizing an IBM Granite model with a Retrieval-Augmented Generation (RAG) pattern with Janes data.

(Source: IBM, Press Release, December 2023)

• Google LLC launched Gemini Advanced—the latest updates to its Gemini AI assistant, including its new agentic feature named Deep Research—along with access to try Gemini 2.0 Flash, its latest experimental model.

(Source: Google LLC, Press Release, December 2024)

• Accenture and NVIDIA announced the expansion of their partnership to help the world's enterprises rapidly scale their AI adoption. With generative AI demand driving $3 billion in Accenture bookings in its recently closed fiscal year, the new group will help clients lay the foundation for agentic AI functionality using Accenture's AI Refinery, which uses the full NVIDIA AI stack—including NVIDIA AI Foundry, NVIDIA AI Enterprise, and NVIDIA Omniverse—to advance areas such as process reinvention, AI-powered simulation, and sovereign AI.

(Source: Accenture, Press Release, October 2024)

Europe Artificial Intelligence Market Report Coverage and Deliverables

The "Europe Artificial Intelligence Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering the areas mentioned below:

• Europe artificial intelligence market size and forecast at regional and country levels for all the key market segments covered under the scope
• Europe artificial intelligence market trends as well as market dynamics such as drivers, restraints, and key opportunities
• Detailed PEST and SWOT analysis
• Europe artificial intelligence market analysis covering key market trends, regional framework, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the Europe artificial intelligence market
• Detailed company profiles