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Only 8% of Italian Firms Use AI as Digital Skills Lag Behind EU Peers, Says ISTAT

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Italy remains significantly behind its European peers in the adoption of artificial intelligence (AI) and digital skills, according to the annual report released Wednesday by ISTAT, the country’s national statistics bureau.

Only 8% of Italian enterprises were using AI in 2023 — a far lower share than in other major EU economies. By comparison, nearly 20% of German businesses use AI tools, with higher adoption rates also recorded in France and Spain.

ISTAT’s findings point to a broader challenge for Italy: insufficient digital literacy among its population. In 2023, only 45.8% of Italians aged 16 to 74 possessed at least basic digital skills — well below the EU average of 55.5% and far from the bloc’s 2030 target of 80%. The figure drops even further to 36.1% in the Mezzogiorno, Italy’s economically disadvantaged southern regions, including Sicily and Sardinia.

Brain Drain and Economic Concerns

ISTAT also highlighted the ongoing “brain drain” affecting Italy’s younger population. In 2023 alone, 21,000 graduates aged 25–34 left the country, marking a 21.2% increase compared to the previous year. Over the past decade, Italy has experienced a net loss of 97,000 qualified young workers, exacerbating demographic and labor challenges.

This trend poses long-term risks to Italy’s innovation capacity and productivity, particularly as the country struggles with low growth and aging demographics.

Economic Forecast

Amid mounting external pressures, including U.S. trade tariffs, the government of Prime Minister Giorgia Meloni last month slashed its 2025 growth forecast from 1.2% to 0.6%. Preliminary data showed the Italian economy grew by 0.3% in the first quarter of 2025 compared to the previous quarter.

Outlook

Italy’s sluggish digital transformation threatens its competitiveness in a rapidly evolving EU market that is increasingly driven by AI integration, digital skills, and tech innovation. The report underscores an urgent need for targeted policies to:

  • Boost digital education,

  • Incentivize AI adoption among small and medium-sized enterprises,

  • Retain young talent by fostering innovation-friendly environments.

Without such reforms, Italy risks falling further behind in the digital economy of the future.

Alibaba to Restart Hiring Amid Optimism, Cautions Against AI Investment Bubble in the U.S.

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Alibaba Group Chairman Joe Tsai announced on Tuesday that the tech giant will resume hiring, fueled by increased confidence following a significant meeting between President Xi Jinping and major Chinese tech entrepreneurs in February. Tsai also expressed concerns about large-scale artificial intelligence (AI) investments in the U.S., suggesting they might signal the start of a bubble.

Tsai praised the rare meeting, which included Alibaba co-founder Jack Ma, marking a shift in Beijing’s approach to the tech sector. A regulatory crackdown on the industry several years ago had slowed growth, reduced investment, and led to layoffs. Tsai believes the meeting sent a clear message to the business community: it was time to reinvest and rehire employees.

After a decline in Alibaba’s workforce over the past 12 quarters, Tsai is optimistic that the company has hit rock bottom and plans to start rebuilding. China’s economy has faced several challenges, including slow growth and a real estate debt crisis, leading to job insecurity and weak consumer sentiment. However, Tsai emphasized that hiring would lead to greater job security and income growth, boosting business and consumer confidence.

Tsai also highlighted the success of DeepSeek, a Chinese startup disrupting the AI sector with affordable models, which has helped restore confidence in China’s tech industry. This success, alongside Alibaba’s significant investments in AI, will likely drive the need for more hiring in the sector.

While Alibaba is investing heavily in AI, Tsai expressed concern about the massive investments happening in the U.S. He referred to large investment figures, such as $500 billion, as unnecessary, suggesting that investments are being made ahead of actual demand. Tsai specifically voiced worries about speculative data center construction, seeing signs of a potential bubble in the U.S. market.

In comparison, Alibaba plans to invest 380 billion yuan ($52 billion) in its cloud computing and AI infrastructure over the next three years. The positive sentiment around China’s tech sector, boosted by Xi’s meeting and the success of companies like DeepSeek, has contributed to a 24% rise in Hong Kong’s Hang Seng Tech Index this year.

Blackstone’s £10 Billion Data Centre Project in North East England Approved

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Blackstone, a prominent U.S. private equity firm, has received planning approval for its ambitious $13 billion “hyperscale” data centre project in North East England. The Northumberland County Council granted unanimous approval for the facility on Tuesday, with plans for the site in Blyth, Northumberland to span approximately 540,000 square metres.

The investment, which could reach up to £10 billion, will involve a large-scale data centre campus designed to meet the growing demand for data storage and cloud computing services. These “hyperscale” data centres are integral to supporting businesses, especially with the increased reliance on technologies like artificial intelligence.

The project is set to create substantial employment opportunities, with 1,200 long-term construction jobs and hundreds of positions for the operation of the centres. Additionally, up to 2,700 indirect jobs could be supported by the project. As part of the agreement, Blackstone will also contribute to a £110 million fund aimed at fostering economic growth and job creation in the region, particularly along the newly opened “Northumberland Line” railway.

This development follows the collapse of a previous plan for the site, which was originally designated for Britishvolt’s electric vehicle battery manufacturing plant before its closure last year. Blackstone’s initiative reflects the increasing demand for data centre capacity, driven by the surge in artificial intelligence and cloud computing, despite challenges in meeting this demand, according to recent research by CBRE Group.