European Investors warned that EU companies spending big on generative AI needed to start showing returns on their massive capital injections by next year or risk investors losing patience. Many European traders were bullish about Gen-AI’s potential, but Ahkong stressed that the investors would begin questioning companies that failed to deliver by the end of 2025.
European investors cautioned that AI adopters in the EU market must start showing returns on their investment in the technology; otherwise, investors may lose interest. A survey of more than 100 Fidelity analysts conducted in January revealed that 72% believed AI would have no impact on profitability in the companies they cover by 2025. The Fidelity analysts saw positive impacts over a longer period of time than the average. Several European portfolio managers said their timeframe was shorter.
European investor base calls for proof of ROI among AI adopters
European investors say clock is ticking
for AI adopters to deliver https://t.co/3jCNa0EtVk @reuters pic.twitter.com/3pxIVZE3lu
— Spiros Margaris (@SpirosMargaris) March 26, 2025
Reuters reported that European companies that were spending big on generative AI needed to start showing returns on their heavy investments, or risk investors losing patience. Ursula von der Leyen, President of the European Commission, said the Commission aimed to mobilize a total of €200 billion for AI investments in Europe, making it the largest public-private partnership in the world for the development of trustworthy AI. The European AI Champions Initiative pledged €150 billion, and the Commission promised to top up the €50 billion balance.
Facebook CEO Mark Zuckerberg and Spotify CEO Daniel Ek previously suggested that Europe was ‘particularly well placed’ to make the most of a coming wave in open-source AI. They, however, acknowledged that fragmented regulation was ‘hampering innovation and holding back developers’.
Steve Wreford, the lead portfolio manager of Lazard Asset Management’s global thematic equity group, said the market will lose patience if it does not see a return on its investment. Wreford added that companies adopting AI would be given a break if they did not deliver much this year. He believes that many companies will likely roll out beta-testing and trials in 2025. However, they need to see a notable impact on their bottom lines by 2026. Paddy Flood, a portfolio manager at Schroders, believes that the biggest risk to investing in AI in general is whether people would actually pay for viable AI use cases.
“The market will lose patience with unfettered investment in AI unless it starts to see some return on investment out of the end of it.”
-Steve Wrefor
Starting on Wednesday last week, Meta AI began rolling out its AI-powered chatbot across 41 European Countries, including those in the European Union, as well as 21 Overseas Territories.
European Commission says only 13.5% of EU businesses are using AI
The co-founder and CEO of Klarna, Sebastian Siemiatkowski, said one of the biggest challenges of trying to develop AI and stay ahead in Europe was that EU AI laws were making large and small US companies nervous, which then made them block access to many tools and models, leaving Europeans behind on cutting-edge AI innovation and learning.
President Ursula von der Leyen pointed out that Only 13.5% of EU businesses were using AI, but this needed to change. She added that the European Commission will launch a broad AI Strategy for the continent this year, including an ‘Apply AI’ initiative to drive industrial adoption of AI in key sectors. However, the founder of Viaweb, Paul Graham, alleged that EU users did not get new AI versions until several months after US users because AI companies have to get regulatory signoff first.
According to the Information Services Group (ISG), European enterprises facing cost pressures, skills shortages and increasing regulation were leveraging service providers to modernize their mainframes and integrate them with cloud platforms to drive AI innovation. The ISG said that the region’s slow or near-stagnant economic growth had made enterprises more cautious about AI investments. Many favored smaller, high-impact modernization projects that demonstrated clear ROI.
However, the ISG also mentioned that the use of GenAI in mainframe environments had progressed from niche pilot tests to structured deployments over the past 18 months, particularly in industries like banking, insurance and public administration that relied heavily on mainframes.
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