Geopolitical tensions will continue to impact firms across Europe in 2026; in particular, uncertainty around US policy decisions is affecting both short-term and long-term planning. For firms and public-sector organizations alike, the quest to reduce dependencies on non-European firms — ranging from Chinese supply chains to US digital platforms, large language model providers, and hyperscalers — will intensify.

The EU is making a concerted effort to achieve greater sovereignty over its resources, technology stack, and digital services. Making the EU more competitive is another key goal. While the EU attempts to simplify some legislation — and as the UK drifts both further away on AI and closer on security and defense to EU alignment — firms will face continued legislative impacts from acts such as the European Green Deal and the rollout of the EU AI Act to prohibited and high-risk use cases.

Here’s what European business, technology, and marketing leaders should expect in 2026:

  • No European enterprise will shift entirely from US hyperscalers. Despite growing interest in digital sovereignty and increasing concerns about US cloud providers, a complete shift away from giants — such as AWS, Google Cloud, and Microsoft Azure — to local suppliers is impractical in the short to medium term. Specific industries will begin migrating for niche use cases, but the impact on the overall European cloud market will be negligible. Similarly, we won’t see any large-scale migration to Linux desktops and open-source productivity and collaboration tools due to the lack of enterprise-grade, fully supported offerings. To reduce your dependency on US hyperscalers, revisit your cloud strategy and grant a level of sovereignty to your organization that’s feasible, desirable, viable, and affordable in the face of ongoing geopolitical volatility.
  • EU legislative simplification will fail to deliver enterprise cost savings. In 2025, the EU proposed an “Omnibus” package to ease compliance with laws such as CSRD, GDPR, and the Data Act for smaller firms. The EU touts savings of €4.4 billion from this simplification of sustainability rules. These, and broader savings, won’t emerge, as large firms’ compliance obligations aren’t changing. While smaller firms will see a reduced compliance burden, their enterprise customers will issue long due-diligence queries. For example, GDPR exemptions, such as dropping records of processing activities for firms with less than 750 staff, will backfire as larger controllers flood smaller firms with due-diligence requests, forcing many to remain compliant. Act now to assess impacts across your suppliers and value chains, and proactively manage information to contain costs.
  • Consumer daily use of generative AI will double, but enterprise adoption will lag the US. Despite massive awareness and experimentation, only 6% of European consumers use generative AI daily. As familiarity with AI tools grows — and AI is increasingly embedded in devices, software, and services — daily use among consumers will double in most European countries in 2026. Yet, because most players launch their AI initiatives in the US before rolling them out to Europe — and European firms have less mature AI skills and the EU has tighter regulations — European firms will lag their US counterparts by 10% on most genAI use cases in full production. With lower regulations and no language gap, the UK will buck both trends. Push past the proof-of-concept stage and accelerate your roadmap by investing in the AI quotient of your organization.

Forrester clients can read our full Predictions 2026: Europe report to get more detail about each of these predictions, plus two more bonus predictions. Set up a Forrester guidance session to discuss these predictions or plan out your 2026 European strategy.

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