Dealroom.co – State of AI in Europe, Mar 2026

The State of AI in Europe report provides a comprehensive overview of the current AI landscape, challenges, and opportunities across the continent.

Europe is at a critical juncture in the global AI race, boasting world-class talent but facing challenges such as insufficient investment and regulatory friction. The report highlights a record $21.8 billion investment in AI in 2025, a 58% increase from the previous year, and notes that European AI startups often scale or get acquired by US investors. The next wave of AI innovation is expected to be vertical and applied, with Europe positioned to lead in sectors like health, energy, defence, and fintech. Unlocking capital from pension funds and streamlining regulations could significantly boost growth. Key AI hubs include London, Munich, Zurich, Paris, and others, with Defence, Security & Resilience identified as the fastest-growing AI subsector.