A new report has found that London is Europe's biggest hub for generative artificial intelligence (genAI) startups, with almost 30% of Europe's new startups based in the UK capital. The report, conducted by venture capitalist firm Accel and Dealroom, analyzed 221 startups and their founders throughout Europe and Israel over a six month period. According to the report, European and Israeli generative AI startups are expected to reach over $45 billion ($41.9 billion) in funding by the end of 2024, up from $25 billion ($23.3 billion) in 2023.
The report attributes the UK's success in genAI in part to the founding of DeepMind in 2015, which has been at the core of the UK's industry for more than a decade. Many AI founders come from the UK's major universities, such as Imperial College London, the University of Cambridge, and the University of Oxford. These universities often have backing from Big Tech companies like Google and Microsoft.
Despite this, France leads the way in venture capital investments in AI startups with $2.29 billion ($2.1 billion) over the UK's $1.15 billion ($1 billion) poured into startups from 2021 to 2024. Germany also saw some major investments, with $636 million ($593.6 million).
Three of Europe's best-funded AI companies are located in France: Mistral AI, Owkin and Hugging Face. According to media reports, Mistral AI raised €600 million ($644 million) in new funding last week and has backers in Microsoft and OpenAI.
The report also notes that the success of AI companies in France comes from a high number of math, computer science and engineering graduates in the country. Universities like the Ecole Normale Superieure, Universite Pierre et Marie Curie, and Ecole Polytechnique are specifically mentioned as inspiring Meta to open up a Fundamental AI Research (FAIR) lab in 2015.
