European Companies to Double GenAI Spending in 2024 Despite Value Struggles

InfosysAccording to recent data from the Infosys Knowledge Institute (IKI), the research arm of Infosys, Europe is investing twice as much in generative AI (GenAI) as North America, but it is doing it more cautiously. According to the report, GenAI investments made by European corporations are expected to rise by 115% to $2.8 billion over the course of the next year.

Compared to North America, where spending is predicted to approach $6 billion, the pace of investment is lower, according to Infosys. The highly regulated European market has led to worries about prejudice and ethics, which is partly the reason for this more careful spending. Nonetheless, European businesses are significantly more confident in their capacity to manage and control generative AI systems, as well as to attract and educate personnel, and they are still upbeat about the effect generative AI will have on their industry.

“Generative AI is driving phenomenal transformation across industries, and investment is happening at a rapid pace,” said Balakrishna D. R. (Bali), Executive Vice President Global Head of AI and Industry Verticals at Infosys. “Against the backdrop of an ever-evolving regulatory landscape, organizations must embed responsible AI techniques to not only improve data quality and management, but effectively manage ethics and bias risks. Our research has shown that for European businesses to derive business value, they must develop and evolve an AI-first operating model that prioritizes business transformation and skills development, and enables them to maximize human potential.”

France, Germany, and the UK Leading the Way

IKI polled 1,000 respondents from businesses in 11 Western European nations (Belgium, Denmark, Finland, France, Germany, Iceland, Luxemburg, Netherlands, Norway, Sweden, and United Kingdom) for the Generative AI Radar 2023 – Europe research. The following observations are highlighted by the study, which is further corroborated by interviews with industry executives and AI practitioners.

France and Germany Lead Spending and Adoption

  • In the next year, it is anticipated that France and Germany would spend twice as much on GenAI – almost $730 million in France and approximately $610 million in Germany
  • Approximately 50% of businesses in both nations have either adopted GenAI or have done so and have benefited financially from it; this compares to approximately 40% in the UK, Benelux, and Nordic regions
  • In the next 12 months, the UK is anticipated to surpass Benelux into third position, more than tripling expenditure to over $510 million
  • Over the next 12 months, Nordic firms are predicted to raise their expenditure at the fastest pace possible, more than 2.5 times their present spending, or more than $470 million

European Companies: Deploying GenAI – Few Created Business Value

  • In spite of extensive testing and deployment of GenAI, just 6% of European organizations are able to provide profitable outcomes from their use cases. In the area, 10% of businesses claim that their GenAI initiatives have produced value, with France, Germany, and the UK leading the way.

European Companies: Focused on Ethics and Bias – More Confident about Managing and Controlling GenAI than North American Companies

  • After data security and privacy, European businesses ranked ethics and prejudice as their second-biggest concern. Less emphasis is placed on ethics and prejudice in North American businesses, where these problems rank fourth in importance behind problems like data privacy, useless data, and talent shortages.
  • Additionally, a greater number of European corporations’ boards of directors participate in GenAI initiatives, a reflection of their regulatory worries. In almost 30% of businesses in Europe, boards of directors establish rules and policies, and they serve as the main sponsors in about 20% of cases.
  • Over 70% of responders from Europe expressed confidence in their ability to handle GenAI.

More than 1,000 business executives from various sectors in Belgium, Denmark, and Finland participated in an online survey administered by Infosys in an anonymous manner. The United Kingdom, France, Germany, Iceland, Luxembourg, Netherlands, Norway, and Sweden. The researchers spoke with industry executives and subject matter experts to get more qualitative information.

Go here to see the whole Infosys research report.