Scale Ireland: Funding still the biggest challenge in 2026

European tech firms face a dual challenge of securing adequate funding and navigating evolving digital regulations, according to recent findings from Scale Ireland. The organization's annual survey highlights that while innovation is robust, a significant portion of respondents remain unaware of crucial EU legislation like the AI Act, potentially hindering compliance and market integration for smaller players. This regulatory knowledge gap underscores the need for greater outreach and education to ensure the European tech ecosystem can fully leverage opportunities while adhering to new frameworks. The survey data reveals that a substantial 35.4% of responding companies are not yet familiar with the landmark EU AI Act, a piece of legislation designed to standardize artificial intelligence development and deployment across the bloc. This lack of awareness among tech founders and business leaders is a critical point, as the AI Act is set to impose strict requirements on AI systems, particularly those deemed high-risk. Understanding these obligations, from risk assessment to data governance, is paramount for businesses to avoid future penalties and build trust in their AI-powered products and services. The implications of this awareness gap are far-reaching, impacting not only individual companies but also Europe's broader ambition for digital sovereignty. Businesses unaware of the AI Act's provisions may inadvertently develop or deploy technologies that fall outside its scope or fail to meet its ethical and safety standards. This could slow down the adoption of advanced AI solutions and create a competitive disadvantage compared to companies in regions with clearer regulatory landscapes or greater compliance readiness, ultimately affecting the growth trajectory of the European tech sector.