Deal activity and AI adoption in Europe are rising as firms target productivity gains, GDPR/DORA compliance, sovereign cloud capabilities, and modernization of legacy systems.

The US market is becoming crowded for IT vendors, while Europe, West Asia, and Africa present fresh outsourcing and transformation opportunities.

Major moves include TCS partnering with AI startup Mistral, Infosys expanding its Norway contract with DNB Bank and launching a German marketing platform for Handelsblatt Media Group, and European acquisitions by HCLTech, LTIMindtree, and Hexaware in 2026.

Analysts note Europe’s AI investments are accelerating despite earlier slower tech adoption, tied to opportunities from older infrastructure and growing digital transformation needs.

Indian IT firms are expanding their footprint in Europe, increasing their delivery centers to 35% in 2025-26 from about 11% in 2024, signaling a strategic shift toward European operations.

European revenue growth is outpacing the Americas, with early-2026 results showing about 8.5% year-on-year growth in Europe versus 4.5% in the Americas, and Europe contributing roughly a third of annual IT revenue.

European growth for Indian IT players is accelerating, underscoring strong momentum and potential for continued expansion in the region.

The push into Europe is driven by stricter data regulations like GDPR and DORA, along with cost pressures, prompting localization of tech operations and partnerships with local players.

Firms are investing in AI labs, expanding contracts, and launching products to meet European demand for modern tech solutions.

HCLTech is pursuing local acquisitions in Europe to boost capacity and capabilities amid rising demand for localized digital services.