Can Europe Produce World Class AI Innovation?
The Brussels Edition
## Editorial:
Can Europe Produce World Class AI Innovation?
I spent the week in London and Brussels. MCC Brussels invited me to give a keynote speech at their event: “Unshackling Europe’s Economy.” The entire event can be streamed here. So this week, a slightly different That Was The Week. Here is a short essay on innovation in Europe and the video of my session at the event.
My session was “Unleashing AI for Europe.” The audience, possibly like many readers here, was not a technology audience. The audience was interested in analyzing the EU’s limits and thinking about solutions.
My talk and the audience Q&A are embedded above as a Substack video.
The context for the talk was the glaring reality that AI development is very US-centric, albeit with many, or most, participants from other countries. Europe has only one significant developer of foundation models—Mistral from France. It has competitive features and a strong team, but due to coming later, it has far less developer adoption than OpenAI, Meta, Anthropic, and others.
However, the relative failure of the EU to produce AI leaders is a consequence of deeper problems. Mario Draghi, in his report on EU competitiveness, spells it out:
“Europe is stuck in a static industrial structure with few new companies rising up to disrupt existing industries or develop new growth engines. In fact, there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period. This lack of dynamism is self-fulfilling. Yet, Europe’s need for growth is rising.”
Draghi doesn’t have an analysis of why the EU is falling behind the US. And he does not have any realistic solutions.
My talk looked at what the problem is and how to solve it.
What is the problem?
When examining venture capital investment, the disparity between the EU and US becomes evident:
VC Funds Raised Per Capita: In 2023, the EU venture capital industry raised $31 per capita, whereas the USA and the UK raised $200 and $105 per capita, respectively.