1 Introduction  6

2 AI adoption and investment in the SAFE  13

2.1 June 2025 survey round  13

2.2 December 2025 survey round  14

3 AI adoption: a tale of heterogeneity  16

3.1 Across countries  16

3.2 Across firm demographics (size, sector, age, ownership)  17

3.3 AI adoption and structural characteristics  23

4 Factors shaping firms' use of AI  25

4.1 Drivers of AI adoption among AI using firms  25

4.2 Barriers to adoption and greater AI utilisation  31

5 Financing AI adoption and investment  39

6 AI adoption and firms' business outlook  45

6.1 Impact on investment, productivity and employment  45

Box 1 AI adoption and labour productivity: evidence from a novel survey-based measure  47

6.2 Impact on pricing behaviour  50

6.3 Impact on inflation expectations  51

7 Firms' expected investment in AI  53

7.1 Which SMEs are planning to invest in AI?  56

8 Firms' response to competition in AI investment  58

8.1 How much did competitors invest in AI by June 2025?  58

8.2 Firms' assessment of shares of competitors investing in AI  59

8.3 The impact of information about domestic competitors on firms' investment plans in AI  61

9 Conclusion  63