France Becomes a Mecca for AI Startups
While the US, with industry giants like OpenAI and Google DeepMind, traditionally leads the global AI market, Europe is far from trailing behind. Bolstered by local government support, French AI startups are poised to make a significant impact.
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Throughout 2023, France has positioned itself as the most crypto-friendly country in the EU, implementing national rules for the crypto market long before the European MiCA regulations. This offered market participants simplified registration, with the transition to MiCA expected to be seamless for the crypto business.
Paris has approached the formation of the AI market with enthusiasm. According to PitchBook data, France attracted €9.4 billion in venture capital in 2023, with the artificial intelligence segment leading the investment. For context, this is almost a fifth of the funds raised by all startups in Europe and Israel.
Prominent French projects in artificial intelligence – Mistral AI and Poolside AI – have been significantly funded by the state investment bank Bpifrance. The bank's primary mission is to support innovative sectors of the local economy, including its digital segment.
Mistral AI launched in April 2023 under the leadership of former developers from Meta and Google DeepMind. Within six months, the startup managed to raise $415 million. By the end of 2023, Mistral's market valuation exceeded $2 billion, a considerable amount, though modest compared to OpenAI's $90 billion valuation. Unlike Sam Altman, the French believe in the potential of open-source large language models.
At Mistral AI, we believe that an open approach to generative AI is necessary. Community-backed model development is the surest path to fight censorship and bias in a technology shaping our future,
the startup founders highlight.
Poolside AI, a French startup with American roots, has already attracted $100 million in investment. In 2023, the company relocated to Paris, drawn by the cost-effectiveness of local talent, who are willing to work for a fraction of Silicon Valley prices. Local recruiters note they're available for just 25% of what US AI developers command. Furthermore, the French government offers partial salary reimbursements for employers hiring doctoral students.
It's important to note that France is not alone in its quest to cultivate a national AI market. Nvidia's CEO, Jensen Huang, mentions that Japan, Canada, and India also have similar ambitions. Nvidia is confident that these nations, aiming for AI industry leadership, will fuel demand for chips and other technological components.
The recognition of sovereign AI capabilities is global,
Jensen Huang points out.
Previously, we covered French media tycoon and billionaire Xavier Niel, who has injected €200 million into national AI development. This funding will support various initiatives, including Mistral AI and Poolside AI. Additionally, Niel intends to financially incentivize French AI specialists to return to Paris.
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