Artificial intelligence can help Europe create its own Apple or Google
On October 1-2, the first big summit dedicated to AI security will be held in the UK. On the eve of this event, the Guardian wonders why Europe is losing to the United States in creating IT giants, and whether AI can become a "great equalizer" that will help European IT companies compete with North American ones.
The publication reminds that Europe has become a world leader in many industrial sectors, but it lags behind in IT, despite the fact that it has qualified personnel, scientists, and opportunities provided by the single market. The European equivalents of Amazon or Facebook** have not yet appeared. The "Magnificent Seven", which includes Alphabet, Amazon, Apple, Meta*, Microsoft, Nvidia and Tesla, creates a huge gap between the New York Stock Exchange and the London, Paris and Frankfurt stock exchanges.
The Guardian asked the creators of two successful AI startups to speak about the reasons for this gap. Arthur Mensch used to work in the AI division of Google DeepMind, and then organized Mistral, which this month released a large open source language model. Gabriel Hubert, after returning from California, founded Dust, which develops AI-based corporate "assistants". Mensch and Hubert named several reasons preventing their IT giants from appearing in Europe. One of them is the strength of the US technology sector at the turn of the millennium and the comparative weakness of the European IT business.
According to Hubert, in the USA, especially in California, there was a close-knit community of engineers, designers, entrepreneurs and investors. They could identify business opportunities and quickly realize them in a huge market with the help of a variety of venture capital funds. Facebook in the early 2000s and Twitter in the late 2000s were able to fit into a broader infrastructure that "has already created successful technology companies."
Clara Chappaz, director of La Mission French Tech, a government organization that supports French startups, agrees that American technologies have benefited from access to a huge domestic market and the availability of financing.
A frequent complaint of tech entrepreneurs and an often—heard argument why there is no Google in Europe - European investors may not be risk averse. Although Artur Mensch believes that the situation in Europe is changing: his Mistral was estimated at € 240 million in the first round of financing four weeks after the startup was founded.
In addition, experts note the growth of capital in the European technology sector. According to venture capital firm Atomico, funding for European tech companies has grown from less than $1 billion two decades ago to more than $100 billion in 2021. However, the forecast for 2023 suggests preparing for a drop to $51 billion "due to global pressure on the market." Atomico also notes that fewer and fewer European startups are being created: about 11 thousand in 2022 compared to 18 thousand in 2020. And according to Pitchbook, only four new "unicorns" (companies with a market value of $1 billion and above) have appeared in Europe this year, compared with 40 in 2022.
Specialists returning from the USA, who, like Hubert, come to Europe and found promising startups here, can help the emergence of European IT giants. The Guardian calls them the "Silicon Valley diaspora." A new wave of entrepreneurs from European tech companies can play a role, who leave leadership positions and start their own businesses.
In addition, experts see prospects in new technological areas. First of all, these are artificial intelligence, as well as climate technologies, healthcare, general software and fintech.
