How Irish SMEs Are Adopting AI in 2025

Irish SMEs may be small in size, but they’re big on ambition. With leaner teams and tighter budgets, these businesses juggle everything from compliance and payroll to adopting emerging technologies like AI. Understanding their evolving needs is key to supporting their growth in a rapidly changing landscape. These businesses may have smaller teams, but their ambitions are just as bold as those of medium and large enterprises. With limited resources and leaner structures, SMEs often face unique challenges - from managing compliance and payroll to adopting new technologies like AI. That’s why understanding their evolving needs is so important. 

To better understand how Irish SMEs are approaching AI, we looked at insights from the SD Worx Pulse 2025 – an independent survey conducted by iVox across 16 European countries. In Ireland, responses from 1,000 employees and 300 employers offer a valuable snapshot of local sentiment. The findings shed light on how Irish SMEs are thinking about AI, where they’re investing, and what concerns or opportunities they see on the horizon.  

57% of respondants believes AI may shift the workplace toward being less human-centric 

The human touch is the lifeblood of small and medium-sized businesses, who rely on their direct contact with their customer base in order to foster loyalty and long-term patronage. With AI rising and the human touch becoming less visible, many SMEs are facing a critical question: how do you embrace innovation without losing the personal connection that sets you apart?  

Customers of smaller businesses often value the familiarity, trust, and responsiveness that come from real human interaction. As AI tools become more common in customer service, HR, and operations, there's a growing risk that businesses may unintentionally distance themselves from the very people they aim to serve. The challenge for SMEs is not to resist AI, but to integrate it in a way that enhances the human experience - automating the routine so that people can focus on what they do best: building relationships, solving problems, and creating meaningful connections. 

See also: How Bear Market Coffee Ensures Reliable Payroll with SD Worx

Regulation is catching up with innovation, and SMEs need to be ready. As we stand at the intersection of innovation and enterprise, it's clear that artificial intelligence is no longer a distant frontier; it’s a present-day force reshaping how Irish SMEs operate, compete, and grow.   

In a recent study by Trinity College Business School, it was found that  

Smaller organisations are lagging behind larger ones in AI adoption. While no small organisation reported having an AI-first policy, more than 10% of larger organisations now claim to be AI-first - up from 3% in last year’s survey. This suggests that larger enterprises are leading the charge in fully integrating AI into their operations. 

While this is understandable - larger organisations having the funds and resources to deep dive into exploring AI - SMEs need to keep up so that they don’t get left behind in an inefficient system.  

In April 2021, the European Commission proposed the EU AI Act - the world’s first comprehensive legal framework for artificial intelligence. The Act classifies AI systems into four risk categories - unacceptable, high, limited, and minimal - with regulatory obligations increasing based on the potential harm to users. This risk-based approach ensures that AI is deployed safely, ethically, and transparently. 

For Irish SMEs, this legislation is both a challenge and an opportunity. While the Act applies uniformly across all EU member states, it includes specific provisions to support small and medium-sized enterprises. These include simplified documentation, tailored training, proportional compliance costs, and priority access to regulatory sandboxes - controlled environments where SMEs can test AI solutions without the full weight of regulation 

The first provisions of the AI Act came into force on 2 February 2025, with full implementation rolling out over the next two years. For SMEs, this means now is the time to audit existing AI systems, understand their risk classification, and prepare for compliance. The Act emphasizes that AI must be safe, transparent, non-discriminatory, and environmentally sustainable, and crucially, that human oversight must remain central to prevent harmful outcomes. As of August 2nd, 2025, penalties for non-compliance come into effect. 
 
See also: European AI Act: Penalties take effect on 2 August 2025

While the regulatory landscape may seem daunting, the AI Act offers Irish SMEs a clear framework to innovate responsibly and build trust with customers. In a market where digital trust is becoming a key differentiator, compliance isn’t just about avoiding penalties- it’s about staying competitive.