European firms to double Gen AI spending in 2024: Infosys

Europe is doubling down on generative AI (GenAI) investment but is on a more cautious path than North America, according to new research from the Infosys Knowledge Institute (IKI), the research arm of Infosys.

The research forecasts that European companies will increase GenAI investments by 115% in the next year, to $2.8 billion.

The pace of investment is slower than in North America where spend is expected to reach close to $6 billion. This more cautious spending is largely due to concerns around ethics and bias driven by the more regulated European market, the research says.

Despite high levels of experimentation and implementation with GenAI, only 6% of European companies generate business value with their GenAI use cases, according to the survey. France, Germany and the U.K. lead the region, with about 10% of companies reporting value delivered by their GenAI projects.

However, European companies remain optimistic about generative AI’s impact on their business and are much more confident in their ability to train and recruit talent, as well as manage and control generative AI systems.

France and Germany are expected to double spending on GenAI, to nearly $730 million in France and almost $610 million in Germany, in the next 12 months. In both countries, about 50% of companies have either implemented GenAI or have implemented and have created business value from it – compared with roughly 40% in the U.K., Benelux, and Nordics. The U.K. is expected to move past Benelux into third place in the next 12 months, more than doubling spend to nearly $510 million.

Nordic companies are expected to increase spending at the highest rate in the next 12 months – more than 2.5x their current spending, to more than $470 million.

European companies identified ethics and bias as the second biggest challenge, after data privacy and security. North American companies are less concerned with ethics and bias – where it was the fourth biggest challenge behind issues such as data privacy, unusable data and lack of skills. European companies also have more boards of directors involved in GenAI policies, reflecting their concerns around regulations.

In May this year, Infosys announced the launch of Topaz — an AI-first set of services, solutions and platforms using generative artificial intelligence (AI) technologies. India's other top IT companies such as Tata Consultancy Services (TCS) and Wipro have also announced investments in generative AI.

"Generative AI is driving phenomenal transformation across industries, and investment is happening at a rapid pace. 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," says Balakrishna D. R., executive vice president, Global Head of AI and Industry Verticals, Infosys.