EU AI in Healthcare Market Study and Recommendations

Detected March 17th, 2026

Summary

A new study commissioned by the EU's DG CONNECT analyzes the EU digital health market, projecting significant growth driven by AI adoption. The study highlights the increasing integration of AI in healthcare and proposes policy recommendations to boost innovation and support SMEs.

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This document presents a study on the EU digital health market, focusing on the growing adoption and economic impact of AI-enabled healthcare technologies. The study, commissioned by DG CONNECT, indicates that 94% of healthcare providers are using or planning to adopt AI solutions, with AI-powered diagnostic tools projected to reach 80% adoption by 2029. The EU digital health market is forecast to grow from EUR 11 billion in 2023 to EUR 61.2 billion by 2035. It also identifies structural challenges, such as a fragmented vendor landscape and limited EU presence in emerging AI domains, and proposes policy recommendations to prioritize funding for AI and genomics, and enhance support for SMEs and scale-ups.

While this document is a notice of a study's findings and recommendations rather than a new regulation, it signals a priority area for the AI Office and highlights potential future policy directions. Regulated entities, particularly healthcare providers and technology vendors, should be aware of the projected market growth and the identified challenges and policy recommendations. There are no immediate compliance deadlines or penalties associated with this notice, but it serves as an indicator of the EU's focus on AI in healthcare, which may lead to future regulatory or funding initiatives.

Source document (simplified)

This study analyses the EU digital health market and economic impact of digital health technologies, including AI-enabled solutions.

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This area is a priority workstream for the AI Office, reflecting its importance for AI innovation and competitiveness. The study Observatory for digital health technologies in Europe was commissioned by the Directorate-General for Communications Networks, Content and Technology (DG CONNECT).

Growing adoption of AI in healthcare

AI has moved beyond experimentation and is increasingly embedded across the EU healthcare landscape. Results highlight that AI is not only one of the most promising technologies, but also one of the most broadly applicable across clinical, operational, and strategic domains:

94% of healthcare providers report that they are already using AI solutions or planning to adopt them
AI is an investment priority among EU digital health vendors, with 23% investing in AI/ML and 20% in Generative AI
AI-powered diagnostic tools are the most mature emerging technology, with adoption projected to approach 80% by 2029
The most common applications include clinical decision support, early diagnosis, patient engagement and remote monitoring
SMEs and start-ups are the backbone of the EU’s digital health ecosystem. However, EU start-ups and scale-ups working on AI, virtual human twins, and digital therapeutics continue to face significant barriers to growth and cross-border expansion, notably limited access to funding and finance. These figures reflect not only a strong appetite for digital innovation but also a sector-wide understanding that AI integration is becoming a strategic imperative.

Strong growth in the EU digital health market, amid structural challenges

With the anticipated transformation driven by AI and other key technologies, the EU digital health market is projected to grow from EUR 11 billion in 2023 to EUR 61,2 billion by 2035, representing a compound annual growth rate (CAGR) of 15,1%.

The vendor landscape remains fragmented and regionally concentrated. Of 690 digital health vendors identified, 196 are headquartered in the EU27, while 345 are based in the USA.

EU-based vendors are mainly active in core health IT and administrative solutions, with more limited presence in emerging areas such as **** AI, genomics and biological sensors. In these domains, healthcare systems often rely on solutions developed outside the EU, highlighting differences in market maturity and investment patterns.

Significant economic impact for healthcare systems

The economic impact analysis shows that several digital health technologies could generate substantial cost avoidance for EU healthcare systems over a ten-year period:

Clinical decision support systems could deliver up to EUR 252 billion in net cost avoidance, equivalent to around 1% of total EU healthcare expenditure
Automated medical image analysis could generate up to EUR 192 billion in net cost avoidance, particularly by improving diagnostic efficiency and accuracy
Mental health platforms show potential net cost avoidance of up to EUR 164 billion

Key policy recommendations

Based on the study findings, the authors proposed several policy recommendations including:

Boost frontier technology innovation by prioritising funding in strategically vital domains, notably AI and genomics
Enhance SME and scale-up support by providing targeted instruments to enable cross-border expansion
Strengthening interoperability and data infrastructure, notably by promoting internationally standards and upgrading national health IT systems
Strengthen organisational readiness and workforce by supporting digital training for healthcare professionals

Methodology

The study draws on a broad evidence base, including:

EU-wide surveys of 300 healthcare providers and 70 digital health vendors
interviews with experts
a market mapping of 690 vendors across 45 technologies
an analysis of more than 46 000 investment records The economic impact analysis is based on a combination of desk research, workshops and validation interview with digital health technology experts across industry, academia and research.