European organizations’ gen AI preparedness has increased, but few feel ready for the associated risks

The preparedness of some European organizations to adopt generative AI appears to be accelerating rapidly, but fewer gains are being made in the areas of risk management, regulatory readiness, and governance models.

According to a Deloitte survey of over 700 senior leaders in France, Germany, Italy, the Netherlands, Spain, and the United Kingdom conducted in June 2024, there was a significant increase over the previous six months in respondents reporting that their organizations are highly prepared or very highly prepared to adopt gen AI in the areas of strategy (up 11 percentage points since December 2023), technology and infrastructure (up 9 percentage points), and talent (up 8 percentage points).

The latest wave of Deloitte’s State of Generative AI in the Enterprise survey also found that Europe-based respondents are focusing less on gen AI’s short-term operational use cases such as reducing costs (down 8 percentage points since December 2023) or improving efficiency and productivity (down 4 percentage points), and instead are turning their attention to applications that can help them gain a longer-term competitive advantage and secure strategic benefits. For example, more respondents are now focused on uncovering new ideas (up 6 percentage points), and encouraging innovation and growth (up 4 percentage points).¹

However, many respondents report significant barriers to the successful development and deployment of generative AI tools and applications—including difficulty managing risks, worries about regulatory compliance, and a lack of a governance model. Only 18% of Europe-based respondents report being highly prepared or very highly prepared in the areas of gen AI risk and governance, up only 2 percentage points from the previous survey period.

And the research indicates that any clarity gained from the arrival of the EU AI Act—which was launched shortly after the survey period, in August 2024, by the European Commission, the executive arm of the European Union²—might not have helped yet. For example, among Germany-based respondents to a recent Deloitte Germany survey gathering executives’ feedback on the EU AI Act, only 36% report that their organizations are well-prepared to implement the act and 52% are concerned that regulation will restrict their AI innovation opportunities.³

Risk and regulation-oriented uncertainty are top concerns for respondents to Deloitte’s State of Generative AI survey across global regions. Only 23% of all respondents rated their organizations as highly prepared to handle risk, regulation, and governance issues related to the technology.

Research and analysis conducted by the Deloitte Center for Integrated Research