Is AI really valuable for European companies? The market impact of AI project announcements

Purpose Artificial intelligence (AI) is expected to disrupt international businesses processes. However, given the complexity and inherent risks associated with AI investments, it remains debatable whether such projects offer tangible benefits to firms. In the global discussion, this paper aims to add an European perspective for international businesses by analyzing the value effects of AI project announcements by European companies. Design/methodology/approach This study is based on an event study methodology to test for abnormal market returns around the announcement of AI projects by European companies. The market perception is further controlled for differences in AI projects like additional strategic partnerships, industry-fixed effects and success in implementation. Findings Contrary to expectations, this event study finds no significant abnormal market reactions to AI project announcements by European companies on general. Project-specific characteristics also do not appear to meaningfully influence investor perception. However, the authors observe clear industry-specific effects: the automotive sector exhibits a comparatively positive market response, while pharmaceutical and telecommunications firms also show above-average abnormal returns around the announcement date. These findings suggest that investors evaluate AI initiatives in Europe through a sector-specific lens, resulting in diverging market reactions. Overall, the results further challenge assumptions about the uniformly US-centric valuation of AI announcements. Practical implications The findings suggest that European managers should align AI announcements with clear, sector-specific innovation strategies to enhance credibility and investor confidence. However, to ensure broader societal benefit, AI strategies must be inclusive, avoiding the concentration of value in select sectors. These insights highlight the need for context-sensitive approaches to AI communication and implementation across Europe independent from the US role model. Social implications The findings highlight the heterogeneous interpretation of AI projects across sectors in Europe. The sector-specific nature of investor reactions suggests that firms must adopt tailored AI communication strategies that resonate with the expectations and realities of their respective industries. This underscores the broader societal importance of fostering public trust in AI, not just as a technological innovation, but as a tool for meaningful and inclusive social and economic progress. Originality/value This study contradicts the common understanding of market perception on AI projects from the USA and adds a European perspective, which indicates that the value of AI projects differentiates geographically.