By Sasha Rubel, Head of AI and Generative AI Policy, EMEA, Amazon Web Services (AWS)

The adoption of AI across Europe has reached an inflection point. Although many organisations have embraced AI and more than half of European businesses now use the technology, less than a quarter have reached the most advanced stage of adoption, using it primarily for efficiency gains, not to reinvent and innovate. Moving beyond this requires a shift in leadership mindset – treating AI not as a basic efficiency tool, but as a creative partner and catalyst for business transformation.

Europe's biggest bottleneck is complexity

It’s true that cloud infrastructure, compute access, funding, skills, and clear, simplified rules are all critical to AI adoption – and businesses are clearly telling us what they need from policymakers: simplified regulation to decrease the costs of compliance, streamlined access to funding, and AI literacy embedded into every level of education. Yet challenges remain, substantiated by several compelling statistics.

For instance, Unlocking Europe’s AI Potential 2026, an independent report by Strand Partners commissioned by AWS, found that only 31% of businesses have a formal AI strategy and just 22% are using AI for advanced use cases. Yet regulatory complexity is Europe’s most consequential bottleneck, taxing every other ambition. The International Monetary Fund (IMF) estimates that Europe's internal market fragmentation imposes the equivalent of a 110% tariff on innovation – a structural penalty that no amount of investment in skills, compute, or infrastructure can fully overcome while it persists.

European businesses now allocate 42% of their technology budgets to compliance, up from 40% in 2025, while 41% of businesses cite fragmentation within the EU as a challenge when it comes to scaling. Another constraint at the centre of Europe’s AI challenge is skills, with over 50% insisting AI and digital talent shortages are preventing them from adopting AI. When 38% of Europe's most innovative startups also indicate they would consider relocating to scale, the signal is unambiguous.

Simplifying the regulatory landscape would do more than simplify scaling for EU businesses – it would release the capital, talent, and confidence needed to secure Europe's long-term competitiveness.

Transitioning AI foundations into real-world impact

Putting these strategies into practice is essential to move towards an approach that is responsible by design – and critical to going further and faster with AI. The good news is that we are seeing what is possible when businesses integrate AI into the core of what they do. 

For example, Mindflow is using AI agents to automate complex IT and cybersecurity tasks in seconds rather than hours, while Iktos is combining AI and robotics to accelerate drug discovery and cut development times in half.

Skills are equally critical and represent Europe's greatest opportunity. Europe already has strong research institutions, growing adoption, and access to world-class technology. We now need to equip more people and organisations to use these tools effectively. The returns will extend far beyond AI itself, driving productivity, competitiveness, and long-term economic growth.

Public sector adoption also has a central role to play: when governments adopt AI, it sends a huge signal and builds public trust. As Europe looks to its AI future, the right investments and policy decisions can further accelerate this transformation, positioning the continent to scale AI adoption with greater efficiency and impact.

The blueprint for Europe’s AI competitiveness

Europe has strong foundations for achieving this outcome: growing AI adoption, world-class researchers, innovative startups, and global technology champions. We now need to convert that momentum into lasting growth, and there are three areas crucial for Europe to lead in AI.

First, reduce regulatory fragmentation so businesses can scale across borders without friction. Second, invest in AI readiness through education, workforce retraining and support for SMEs. Third, improve access to growth capital so Europe’s most ambitious companies can scale here rather than elsewhere. Europe should be the best place to scale, not just start.

The recently concluded GITEX AI EUROPE convened policymakers, innovators, investors and business leaders in Berlin and provided an important platform to advance the collaboration, policy dialogue, and practical action needed to translate Europe's AI ambitions from strategy to scale.

No single stakeholder can solve this alone. Governments, industry, and educators all have a role to play. If we get those foundations right, Europe can lead the next wave of AI innovation.