From Optional to Essential: Why 91% of German Companies Prioritize AI

The adoption of Artificial Intelligence (AI) is now moving from a future thought–provoking technology to a key force driving business strategies in Germany.

A recent study published in the magazine “Generative AI in the German Economy 2025” uncovers an amazing change in mind-set: no less than 91 percent of the companies in Germany now view generative AI as key to their business models and future value creation, a huge rise from the 55 percent of a year ago.

This is a testimony to an in-depth understanding that the German business sector has come to that AI is not just a nice-to-have innovation but a key factor in competitiveness and economic growth.

The new report pulls on a survey of more than 650 decision makers in 18 industries in March 2025, highlighting an increasing dedication to AI. However, reflecting its growing importance, 82% of firms are planning to increase their AI budgets over the next 12 months, 51% are expecting their budgets to increase by at least 40%. This new level of investment signals a more concrete focus on moving out of the experimental phase and into broader deployment.

German companies expect big things from AI. Among the most significant anticipated effects are a strong increase of innovation (72%) and more rapid data analysis (71%). At the same time, businesses expect to experience more staff turnover (49%), more automation (48%, and new product and market opportunities (47%).

This is consistent with previous research showing that AI can improve efficiency, reduce costs and speed decisions. Automation and AI in manufacture can, for example, enable predictive maintenance and better quality control, in finance it supports the fight against fraud and better risk assessment.

However, despite the massive hype and investment, obstacles persist. The study points to a consistently lagging pipeline in things like governance, ethical guidelines and training of employees. Ethical concerns (68%), security and compliance (52%), and unclear regulations (43%) are identified as key hang-ups.

Though 95% of businesses are dealing with responsible AI use, 26% have put in place a company-wide strategy and two-thirds feel the need play catch up in gearing up for regulations like the EU AI Act.

However, the long term trend is obvious. AI is expected to have a lot of value in the German economy and could contribute an additional EUR 116 billion in202rong>30rong>. This transformation is also being driven by Germany’s excellent research environment and by government initiatives – like the recently launched “AI Strategy for Germany”.

As more and more companies are defining and investing heavily in an AI strategy of their own, the learning is loud and clear: AI is not a nice-to-have; it is a must have to stay competitive in the current economic landscape.