Freshworks Report Highlights Rising AI Governance Challenges in Europe

Freshworks' Global Cost of Complexity Report, based on responses from 12,021 IT decision‑makers across six markets, warns that expanding use of generative AI is creating new layers of internal bureaucracy. In Germany, 85 % of surveyed IT leaders say AI complexity has increased their teams' workloads, and 82 % report that 10‑39 % of AI‑related time is spent on handling that complexity rather than on strategic initiatives. German IT staff now devote roughly 27 % of AI work to integration, troubleshooting and governance, while about 26 % of AI budgets are eroded by these “complexity taxes”. A third of respondents (37 %) view AI complexity as a serious problem, the highest share among the surveyed countries.

A related analysis of “Shadow AI” in French enterprises shows a similar governance gap: although 92 % of IT executives believe they can see which AI tools are in use, 71 % admit unauthorized AI applications are still being employed. The European Parliament is calling for tighter rules to protect personal data and maintain human oversight of automated decisions. Both findings underscore the need for simpler, more effective AI governance frameworks to prevent productivity losses and compliance risks.