European AI startups are in demand. In 2023, $13.7 billion in venture capital was invested in European AI startups. One billion of this went to the British unicorn Wayve, supported by companies like Softbank, Microsoft, and Nvidia.
According to TechCrunch, an analysis by Balderton Capital and Dealroom shows that about 25% of venture capital went into the AI sector, which is highly sought after due to recent developments. This marks a 15% increase compared to four years ago.
James Wise, a partner at Balderton Capital, sees this as proof of Europe’s competitiveness. He believes that AI companies with groundbreaking technology can raise hundreds of millions of euros in their early stages in Europe, just like in the US.
AI is considered a significant growth factor. The positive figures contrast with the often critical view of Europe as a tech hub. According to Balderton and Dealroom, the total value of European AI companies has doubled in the last four years, now amounting to $508 billion. The sector accounts for nearly 15% of the entire European tech industry.
Interestingly, the capital doesn’t always come from Europe. American AI companies increasingly see the continent as a talent pool. AI startups are also becoming an important success factor for the European job market. While many renowned companies are cutting jobs, the AI sector has seen a 168% increase in employment since 2020. More than 349,000 people now work in young AI companies, which could soon overshadow large corporations in terms of productivity.
Thanks to European stars like Mistral AI and Photoroom, a kind of snowball effect is emerging. Their new AI technologies enable other companies to significantly boost their productivity. According to a survey conducted by Balderton Capital among CTOs, 93% of companies reported that generative AI has significantly changed their workflows. The effects are measurable: engineers now work up to twice as efficiently, and companies can save an average of 20% of their operating costs.
“We are still dependent on the US market, but the European ecosystem is developing very dynamically,” says Wise in an interview with TechCrunch. He also predicts that the AI sector, as currently discussed, might soon dissolve. In the future, AI will be so deeply integrated into all areas that distinguishing it may no longer be necessary.