European AI Infrastructure Spend Doubles to $9.1B in Q3 as Tech Services Market Surges

Europe’s combined technology services market contract value soared 56% in the third quarter to $14.9B, marking its fastest growth in eight years according to the EMEA ISG Index. AI-driven infrastructure-as-a-service (IaaS) spending more than doubled from the prior year, surging 106% to reach a record $9.1B. The DACH region reclaimed the top spot as Europe's largest managed services market with $1.5B in contract value, an 80% year-over-year increase. Manufacturing accounted for a quarter of the region's managed services spend, with its annual contract value jumping 74%, while the energy and financial services sectors saw double-digit declines. Engineering, research and development (ER&D) services jumped 54% to $475M, propelled entirely by physical engineering work related to the buildout of new European data centers. "The European market is absolutely roaring right now," said Anthony Drake, president, ISG EMEA. "We’re seeing double-digit growth in managed services, led by business process outsourcing, as enterprises continue to emphasize efficiency and cost savings, but the real story is the meteoric rise in infrastructure spending to support accelerating AI adoption."