Artificial intelligence is making headlines worldwide, but for most small and medium-sized enterprises in Cyprus it remains more concept than practice. Despite growing awareness, 86% of SMEs have yet to integrate AI into their operations.
The stakes are quite high as we are talking about a gap that translates into an estimated €300 million in untapped market value.
The debate is no longer about whether AI will reshape Cypriot business. It’s about who will seize the opportunity first and which companies will move first to capture the advantage.
The EU Context
Across Europe, the momentum is undeniable. The European Commission reports that around 13.5% of enterprises now use AI, up significantly from just a few years ago.
Cyprus is moving in the same direction, but from a lower base. Adoption rates climbed from 4.7% in 2023 to 7.9% in 2024.
A healthy jump, but still far behind the EU average.
What we spot clearly is that the larger firms are leading the way, while SMEs remain hesitant. Concerns about cost, expertise, and data quality continue to hold many back. But as European peers move forward, the gap between those who act now and those who wait will only grow.
Local Momentum
Despite the cautious pace, Cyprus is putting strong foundations in place.
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The government, in collaboration with Research and Innovation Foundation (RIF), has made AI a national priority.
A €285 million national AI fund has been launched to fuel research, adoption, and innovation.
The National AI Taskforce is already shaping strategies to support both policy and practice.
Indirectly, it’s a recognition that Cyprus must be part of the digital economy’s next chapter.
Where SMEs Can Start
The good news is that adopting AI doesn’t require massive budgets or entire IT departments. Many of the most effective applications are low-cost, high-impact, and easy to implement.
Marketing automation: Drafting social posts, personalizing email campaigns, and optimizing ad spend. Tools like ChatGPT or Jasper can generate drafts in seconds, leaving teams more time for strategy.
Customer support: Simple chatbots and FAQ assistants can handle routine queries, freeing staff to focus on higher-value customer interactions.
Admin tasks: AI can help with invoicing, scheduling, or generating reports, the kinds of repetitive work that silently consume hours every week.
These aren’t theoretical possibilities. They’re immediate, practical wins that dozens of European SMEs are already applying.
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The Risk of Waiting
Every business leader in Cyprus faces the same reality that AI adoption is accelerating elsewhere.
Those who move first won’t just save costs, as they’ll offer better customer experiences, faster responses, and more tailored services. In a market as compact and competitive as Cyprus, this first-mover advantage is even more powerful.
Customers will quickly adjust their expectations to the new standard. The businesses that hesitate may find themselves playing catch-up against competitors who have already redefined what “good service” looks like with AI.
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The Road Ahead
Cyprus may lag Europe today in AI adoption, but the direction of travel is clear.
With RIF initiatives, a €285 million fund available, and national momentum gathering, the infrastructure for change is already in place. What’s missing is decisive action from SMEs themselves.
The €300 million market opportunity is real. The tools are accessible. The support structures are being built.
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The only question that remains is: who will take the leap, and who will be left behind?