Key Takeaways
- Nearly two-thirds (65%) of Irish businesses now use AI, the highest adoption rate in Europe, with more than 160 Irish businesses adopting AI every day over the past year
- Nearly half (47%) of businesses cite AI and digital skills shortages as the biggest challenge, up from 43% in 2025
- Most AI adopters are using AI for basic purposes, while a small portion surge ahead; closing this gap would add an estimated €10.1 billion in additional GVA for the Irish economy
The adoption of artificial intelligence (AI) is accelerating in Ireland, with nearly two-thirds (65%) of businesses now using AI, up from 45% last year. According to the latest edition of Amazon Web Services' (AWS) Unlocking Ireland's AI Potential report, this is the highest AI adoption rate in Europe, ahead of both the European average (54%) and the UK (64%). Ireland’s 44% year-on-year growth rate outpaces every major European economy, with more than 160 Irish businesses adopting AI for the first time every day over the past year.
The report, conducted by independent consultancy Strand Partners and commissioned by AWS, reveals that 66% of Irish businesses using AI report productivity gains, while 70% expect AI to accelerate business growth, and more than three-quarters (76%) say AI has helped them to innovate faster.
But the headline figures mask a more nuanced challenge. While AI adoption is widespread, business transformation through advanced AI is lagging. Currently, most businesses are still using AI for basic purposes – speeding up routine tasks such as summarising documents, or answering simple queries through off-the-shelf chatbots. This is equivalent to owning a smartphone and only using it to make phone calls.
Just 20% of Irish AI-adopting businesses have reached the advanced stage (where AI forms part of core business processes and decision-making), up from 17% last year but behind the European average of 22%. This matters because the economic value of AI scales dramatically with depth of use. When businesses use AI to redesign workflows, accelerate decision-making, and build new products and services, they report average efficiency gains of 66%, compared with just 38% among basic users.
In fact, closing the gap between basic and advanced AI adoption could unlock an estimated €10.1 billion in additional gross value-added (GVA) for the Irish economy, almost twice that generated by Ireland’s agriculture, forestry and fishing sector combined.1
AI momentum is spreading beyond Dublin
While Dublin and its surrounding counties lead with a 74% AI adoption rate, compared with 58% across the rest of Ireland, the fastest acceleration is happening in regional hotspots: the South-West (58% year-on-year growth), the West (52%), and the Mid-West (48%) are all outpacing Dublin’s 38% growth.
Shaped by existing sector strengths, university networks, and industrial clusters, regions are developing their own AI identities, from Cork’s pharmaceutical, medtech, and technology sector, to Galway’s established medtech cluster, and Limerick’s engineering and advanced manufacturing base.
Small-and medium-sized enterprises (SMEs) outside Dublin are a particular bright spot. While they face greater constraints on skills and talent, they are adopting AI in highly practical, outcome-driven ways – automating admin, managing cash flow, and improving customer response times – with 63% reporting measurable productivity gains. For these businesses, AI is acting as a force multiplier, allowing smaller teams to compete more effectively without significant headcount growth.
"Ireland now has the highest AI adoption rate in Europe, but other countries are moving fast, and adoption alone won't sustain our lead," said Niamh Gallagher, Country Lead for AWS in Ireland.
"The gap between basic and advanced AI represents more than €10 billion in unrealised value. To capture that, we need to invest in skills at every level, scaling AI across public services, and ensuring businesses in every region have the access and support they need to unlock the opportunity of AI. At AWS, we're committed to working with Ireland's policymakers, educators, and businesses to convert this momentum into lasting, broad-based economic growth, and we're backing that with investment in infrastructure, skills, and community programmes right across the country."
Ireland’s startups lead on AI, but face challenges when scaling
Ireland's startup ecosystem is one of its growing strengths; more than two-thirds (68%) of startups say they feel ready for the next wave of AI, compared with just 20% of SMEs. But as these businesses grow, they increasingly encounter challenges that make scaling difficult: over a third (34%) of Irish startups say they would consider leaving Europe to scale their business, citing greater availability of funding (58%), faster ability to scale internationally beyond Europe (52%), and better access to global customer bases (48%).
Encouragingly, startups are equally clear about what would keep them in Europe: a predictable and stable policy environment (62%) and greater availability of funding, including venture capital, growth capital, and public funding (55%).
The digital skills gap continues to be the single biggest hurdle hindering Ireland’s AI ambitions
Almost half (47%) of businesses state that AI and digital skills shortages are a challenge to AI adoption, up from 43% last year. The faster businesses adopt AI, the more acutely they feel the absence of the skills needed to use and implement it effectively.
Only 18% of Irish businesses say they have a strong AI skillset today, yet 85% expect AI skills to be important in their industry in the next five years. Businesses estimate that AI literacy will be required in more than half (55%) of new jobs created over the next three years, and they are prepared to pay an average 52% salary premium for AI talent, up from 48% last year. Applied to Ireland’s median full-time salary of €44,816,2 that premium is worth an additional €23,300 per year.
Despite this, it takes seven months to fill a digital role, up from five-and-a-half months a year ago, while 42% of businesses report difficulties attracting local talent. Only 34% of citizens say they have received any form of AI or digital training.
Left unaddressed, the AI and digital skills gap will be the biggest hurdle hindering Ireland from converting Europe-leading AI adoption into Europe’s most productive AI economy.
When the public sector leads on AI, the whole economy follows
This year’s data highlighted the role that government can play in accelerating Ireland’s AI adoption. More than four in five (81%) businesses say they are more likely to adopt AI if the public sector integrates it into its own systems, and 82% say government support such as grants and tax incentives is important in their decision to adopt. Similarly, 38% of startups say public sector adoption is crucial or very important to their ability to scale – though more than a third (36%) of businesses cite complex or slow public procurement processes as a challenge.
This is the multiplier effect. When government adopts AI visibly and effectively, not only does it improve public sector efficiency, it also builds public confidence that the technology works and stimulates growth by creating market demand for AI solutions. Ireland is already building the foundation: the Government’s updated National Digital and AI Strategy, Digital Ireland – Connecting our People, Securing our Future, set out 90 actions to strengthen Ireland’s position as a digital leader and global hub for applied AI. Bodies such as the Office of the Revenue Commissioners are already leading by example, using AWS AI services to serve citizens with greater speed and accuracy and reduce call wait times.
Minister for Enterprise, Tourism and Employment, Peter Burke TD:
“We welcome the publication of this report which demonstrates the progress Irish businesses are making in embracing digital technologies. While these findings are encouraging, we must continue to accelerate the adoption of digital and AI technologies across enterprises, particularly among SMEs, to strengthen competitiveness and boost productivity.
The Government remains committed to supporting digital transformation across the economy. Through the National Digital and AI Strategy, Digital Ireland: Connecting our People, Securing our Future, we are delivering a range of policy initiatives to drive greater AI adoption, ensuring that businesses of all sizes can fully realise the benefits of the digital economy.
We look forward to building on this momentum. The International AI Summit this October will convene EU and global leaders from business and government to showcase developments in areas such as agentic AI, quantum-enabled systems and workforce transformation, charting a path from basic AI use towards more advanced deployment."
Ireland has all the right ingredients; now it needs to act
Ireland is home to 16 of the world’s top 20 tech multinationals, has a growing startup scene, world-class universities and the highest AI adoption rate in Europe. With Ireland holding the Presidency of the Council of the European Union throughout the second half of 2026, the country also has a unique opportunity to help shape the European conversation on AI adoption, innovation, and competitiveness. But this momentum alone isn’t enough.
The report identifies three priorities for the year ahead:
• Move businesses from adoption to transformation through practical support for AI strategy development, including stronger data foundations, greater access to cloud infrastructure, and programmes that help organisations embed AI into core products, services, and operations.
• Close the digital and AI skills gap at pace by investing in workforce retraining, public-private partnerships, and AI literacy at every level of education.
• Strengthen the public sector’s position as a flagship adopter of AI, embedding AI across public services and reforming procurement, so innovative businesses can scale through public sector partnerships.
Amazon’s continued investment in Ireland
Since 2010, Amazon has invested more than €25 billion in Ireland, and in 2025 alone, the company invested over €3 billion, including infrastructure investments and compensation to employees.
AWS launched its first infrastructure Region outside the US in Ireland in 2007. Research by Indecon International Economic Consultants found that AWS has contributed over €11.4 billion in economic output since 2012, supporting an average of more than 10,000 jobs per year in local communities.
Recent infrastructure investments include Fastnet, a new transatlantic subsea cable connecting the US and County Cork, and the 126 MW Derrinlough Wind Farm, a €150 million investment delivering clean energy equivalent to powering 90,000 Irish homes.
AWS also continues to invest in skills and communities. The Amazon Think Big Space in Tallaght has engaged over 31,000 students since 2022, and AWS collaborates with TU Dublin and the Drogheda Institute of Further Education on Data Centre Technician programmes, providing 40 scholarships each year and clear pathways into tech careers.
