AI is expected to add €250bn to Ireland’s economy by 2035, as AI use surges to 91%, according to a report by Microsoft and Trinity College Dublin.
The AI Economy in Ireland 2025 report produced by Trinity College Dublin in collaboration with Microsoft Ireland indicates that not only can Ireland boost its GDP (gross domestic product) by €250bn, a further €60bn could be generated if the country innovates responsibly.
The report indicates that AI adoption in Ireland has surged to 91%, nearly doubling from 49% in 2024, a significant leap that now puts Ireland ahead of many of its EU counterparts after previously trailing behind.
“Ireland can play a leading role in the era of AI, driving sustainable economic growth across sectors and setting the stage for global competitiveness as AI adoption continues to surge”
Drawing on insights from 300 senior leaders across the island of Ireland, AI Economy in Ireland 2025 report indicates that the €310bn increase in valu will be made possible depending on how businesses, government, and industry leaders harness AI’s capabilities and implement policies that foster responsible innovation.
First there was electricity, then the internet, and now AI
The report indicates that Ireland’s GNI (gross national income) is expected to increase by €130bn by 2035, signifying the economic potential for the SME sector, which represents 99.8% of enterprises.
With the right policies and widespread AI adoption, GNI could be up to €86bn higher than in a baseline scenario.
On a per capita basis, Ireland’s GNI could rise to €160,000 per person with optimal AI adoption and policies – €30,000 higher than a non-AI baseline scenario.
“Increasingly recognised as a general-purpose technology, similar to electricity and the internet, AI is becoming a fundamental driver of economic growth, and this new report highlights its transformational impact on Ireland,” said Catherine Doyle, General Manager, Microsoft Ireland.
“Ireland is uniquely positioned to capitalise on AI’s capabilities, thanks to its thriving tech ecosystem, skilled workforce, and forward-thinking government initiatives. With a collaborative approach across government, academia, and industry, Ireland can play a leading role in the era of AI, driving sustainable economic growth across sectors and setting the stage for global competitiveness as AI adoption continues to surge.”
While the potential for AI to drive economic growth is clear, organisations still face significant challenges in adopting AI effectively.
Fears of a shadow AI culture emerging
Despite growing recognition of AI’s value, with 50% of organisations (18% increase on 2024) believing AI will enhance productivity, only 8% of organisations have adopted an AI-first approach—integrating AI across all divisions.
A key issue appears to be the lack of formal strategy and governance frameworks, creating gaps in secure and responsible AI implementation. In line with the vision of a thriving, competitive AI ecosystem, about half of organisations do not yet have clear AI policies, hindering their ability to manage AI usage effectively.
This challenge is compounded by the persistence of a “Shadow AI Culture,” where employees independently adopt AI tools without the organisation’s oversight.
80% of organisations report employees using free AI tools without built-in enterprise security controls (45% in 2024), while enterprise-grade AI tool usage doubled (18% in 2024 to 42% in 2025). 61% of managers acknowledge AI usage even in workplaces where it is officially restricted (30% in 2024).
Workforce readiness is another critical factor that is impacting AI adoption, according to the research. Organisations, particularly those in the public sector, face significant challenges in developing an AI-ready workforce.
One notable finding is that multinationals report greater ease in training staff for AI roles, with 70% stating their teams are skilled and easily trained in AI. This contrasts with just 55% of public sector organisations sharing the same view.
The report also highlights significant governance and AI adoption challenges, especially within the public sector, which continues to lag the private sector in AI integration.
Only 10% of public sector organisations have a formal AI policy in place. A further 40% are in the process of developing one, leaving half without structured AI governance.
30% of multinationals use AI in most or all decision-making roles, compared to only 15% in the public sector.
70% of domestic companies feel culturally ready for AI, while less than 50% of public sector organisations report the same readiness. “Ireland is at a pivotal moment in its AI adoption journey, and this year’s research underscores both the progress made and the work still to be done,” said Dr. Ashish Kumar Jha, Associate Professor of Business Analytics at Trinity Business School and co-author of the report.
“AI adoption in Ireland has nearly doubled in the past year, but the challenge now is moving beyond experimentation to full-scale, strategic implementation. The opportunity is huge – AI has the potential to add at least €250 bn to Ireland’s economy (GDP) by 2035. Larger firms are leading the charge, while SMEs – which make up 99.8% of enterprises in Ireland – and the public sector risk falling behind due to barriers in expertise, investment, and structured deployment.
“For Ireland to fully realise AI’s economic potential, we must address barriers faced by SMEs and the public sector, focusing on governance, skills development, and strategic integration. The organisations that thrive will be those that integrate AI as a core strategic asset, investing in talent, governance, and innovation,” Kumar said.
Main image at top: Catherine Doyle, General Manager, Microsoft Ireland; and Dr. Ashish Kumar Jha, Associate Professor of Business Analytics at Trinity Business School and co-author of the report
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