The local AI ecosystem expands and attracts billions in venture capital.
Venture funding in Europe may be headed for a flat year overall, but European AI startups are thriving, with AI companies receiving 25% of the region’s VC funding in 2024, totalling $13.7 billion. This marks a significant rise from 15% four years ago and has led to the creation of new unicorns like Poolside and Wayve. According to James Wise of Balderton Capital, breakthrough AI technology in Europe can now attract hundreds of millions, or even billions, of euros at the early stages, similar to the US.
The collective value of European AI companies has doubled in four years, reaching $508 billion, now making up nearly 15% of the region’s entire tech sector. While much of the funding still comes from outside Europe, especially the US, the local AI ecosystem is flourishing with a growing talent pool. In 2024, 349,000 people were employed by AI companies in Europe, a 168% increase since 2020, indicating a buoyant and increasingly productive sector.
Wise suggests that the rise of smaller, highly productive AI companies will be the future, with generative AI tools significantly boosting efficiency in various industries. This growing adoption of AI tools is likely to continue benefiting the European AI sector in the long run, even if the category becomes less distinct in the future.
