Germany’s small and medium-sized companies, known as the Mittelstand, reduced their investment in artificial intelligence in 2025, according to a new study, even as overall corporate AI spending continued to rise.
A survey of 200 Mittelstand firms by management consultancy Horvath found that AI spending fell to 0.35% of revenues in 2025, down from 0.41% in 2024. In contrast, the average AI investment across all companies increased to 0.5% of revenues, leaving the Mittelstand about 30% below the market average, News.Az reports, citing Reuters.
Horvath said geopolitical tensions, bureaucratic hurdles, and slow digitalisation have caused mid-sized companies to focus on cost-cutting rather than innovation. Concerns over data protection and digital sovereignty are also slowing AI adoption.
Study lead Heiko Fink warned that without accelerated AI transformation, the technology gap could become a serious strategic risk for these companies.