The EU’s Apply AI Strategy: An overly ambitious blueprint for sectoral transformation?

The European Commission’s Apply AI Strategy, unveiled in October 2025, marks a pivotal step in integrating artificial intelligence across the EU’s strategic sectors. Building on the AI Act and the AI Continent Action Plan, the strategy aims to accelerate AI adoption, especially among SMEs, and reinforce Europe’s technological sovereignty.

The Commission found that despite a strong industrial base and a vibrant startup ecosystem, the development and adoption of AI within the EU remains limited, with only 13.5% of businesses and 12.6% of SMEs - the backbone of the EU economy - using these technologies.

The Apply AI Strategy is accompanied by the AI in Science Strategy, which announces the Resource of AI Science in Europe as a flagship initiative and covers the adoption of AI across scientific disciplines. It will be complemented by the Data Union Strategy, expected to be published mid-November, opening new sources of high-quality, large-scale datasets that are essential to the training of algorithms.

What is the main content of the Apply AI strategy?

The strategy promotes an “AI first” policy, encouraging public and private entities to prioritise AI in problem-solving and innovation. It introduces “sectoral flagships” targeting healthcare, robotics, manufacturing, defence, mobility, energy, climate, agri-food, culture, and the public sector. These initiatives include AI-powered screening centres, autonomous driving testbeds, and digital twins for manufacturing and climate resilience.

To address cross-cutting challenges, the strategy focuses on:

• SME support via refocused Digital Innovation Hubs acting as AI Experience Centres.
• Workforce readiness, with tailored training through the AI Skills Academy and sector-specific upskilling programs.
• AI as a production factor, supporting frontier models, AI agents, and digital twins through initiatives like RAISE (Resource for AI Science in Europe).
• Trust and compliance, with tools like the AI Act Service Desk and new guidelines to clarify legal obligations.

AI Act implementation in the works

The Commission announced that it will work with priority on the implementation of the AI Act, through guidelines on the classification of AI systems as high-risk, and guidelines on the AI Act’s interplay with other Union law, covering relevant sectoral legislation (e.g. transport, machinery, radio equipment).

A single governance mechanism underpins the strategy, transforming the existing AI Alliance into a coordination forum for Apply AI stakeholders such as business or consumer associations, civil society organisations, companies, consultancies, citizens, financial institutions and policy makers and launching an AI Observatory to monitor impact and trends. The Commission also calls on Member States to align national strategies with its sectoral approach.

Internationally, the EU positions itself as a cooperative leader in AI governance, engaging with global partners and promoting AI for public good. Strategic investments in AI Factories and Gigafactories aim to bolster resilience and competitiveness.

In sum, the Apply AI Strategy aims to offer a comprehensive roadmap to embed AI across Europe’s economy and public services, fostering innovation while safeguarding ethical standards and societal values.

What to make of the strategy?

On a positive note, it is particularly interesting that the Commission will launch major EU-wide competitions to develop open frontier AI models that are major drivers of innovation. These projects will receive free access to the so-called EuroHPC supercomputers. According to the Communication, their open models will be made widely available to public authorities across Europe as well as to the European scientific and business communities. This is certainly a good step towards the development of EU-grown AI solutions.

Similar to the overarching AI Continent Plan, the Apply AI Strategy includes many well-intended AI-related ambitions. The 19-page document underpins the Commission's ambitions but falls short of providing concrete guidance and setting priorities.

• First and foremost, the Communication focuses on policy initiatives and expertise centres rather than on the investment conditions needed. The EU industry will be ready for further development of AI-based solutions if there is an investment-friendly business environment.
• Second, the Commission advocates Horizon Europe and Digital Europe Programme (€1 billion annually), InvestAI (€200 billion total, €20 billion private), and the Recovery and Resilience Facility (€134 billion for digital investments). Despite these programs, SMEs still struggle to find solid AI funding.
• Third, with the AI Act, the European Commission took risk mitigation in terms of product safety and protection of health, safety and fundamental rights as a starting point. Europe’s risk-averse attitude and regulations seem to scare off investors. The question is whether the Apply AI strategy will make a difference.
• Fourth, the Apply AI strategy adds another layer of incentive mechanisms on top of an overly complex and highly regulated playing field. Any reader of the document will stumble across a multitude of cross-references to other AI-related initiatives like ProtectEU, the Autonomous Drive Ambition Cities initiative, the European Telco AI platform, the Strategic Roadmap on Digitalization and AI for the Energy Sector, the Destination Earth initiative, and the Public Sector AI & Interoperability Readiness Pathway, let alone the Data Union Strategy. How to keep track of all these initiatives and to decide what to do?

What to do next?

‘Simplification’ is high on the Commission’s agenda, yet currently the regulatory landscape looks convoluted and lacks guidance on the interplay between different acts. Any organisation is well advised to follow the developments in their specific sector closely and keep enough flexibility in AI governance programs to react to change. The Digital Omnibus Package that is expected to be published by the Commission on 19 November 2025 marks an important step towards simplification.