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The road to AI

Portrait of Emmanuel Touboul
Managing Director Roland Berger Tech Ventures
Paris Office, Western Europe
+33 6 6916-9769
January 7, 2020

How Germany, UK, France and Israel compete to become financial leaders in AI

"It's important to strengthen the European AI ecosystem and set Europe on a clear path towards global leadership."
Portrait of Emmanuel Touboul
Managing Director Roland Berger Tech Ventures
Paris Office, Western Europe

Access to capital will be key to integrating the European AI ecosystem. Trends in investment flows demonstrate the extent of interdependency within the European ecosystem, as well as its interconnections with the global leaders in AI, namely the United States and China. A coordinated investment, talent and regulatory strategy would strengthen the European AI ecosystem and set Europe on a clear path towards global leadership.

Roland Berger and France Digitale conducted desk research and built an original database that covers 28 European Union members plus Norway, Switzerland and Israel. France, Germany, the UK and Israel account for 80% of investments in AI startups from 2009 to 2019. The analysis focuses on these four countries, as the investments from elsewhere are too scant to draw relevant analysis from them.

A coordinated strategy on investment, talent and regulation will strengthen the European AI ecosystem and put Europe on track for global leadership.
A coordinated strategy on investment, talent and regulation will strengthen the European AI ecosystem and put Europe on track for global leadership.

A flourishing AI ecosystem

The four leaders in terms of number of AI startups funded (the UK, France, Israel and Germany) attract 80% of the total amount of funds raised in this sector over the 2009-2019 period, representing USD 8.6 billion out of a total of approximately USD 10.8 billion in funds raised by AI startups.

Globally, investments in AI startups have been attracting more and more funds since 2014. "The road to AI – Investment dynamics in the European ecosystem" reiterates the trend highlighted in our 2018 study. The European AI ecosystem, under the leadership of France, the UK and Germany, has experienced growth in the last five years, with the annual growth rate of funds raised by startups reaching 55% and France leading in investment attractiveness.

However, the European AI ecosystem is still fragmented and suffering from a lack of integration, which is further endangered by the uncertainties of Brexit. That is why we are currently at a tipping point for the future of the unified European AI ecosystem. The newly appointed EU Commission, with its ambitious political roadmap, should seize the opportunity to design a favorable regulatory framework for the next decade, in sync with the European AI ecosystems.

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Study

The road to AI

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Investment in AI startups is increasing but the European AI ecosystem is fragmented and suffering from a lack of integration.

Published January 2020. Available in
Further reading
Portrait of Emmanuel Touboul
Managing Director Roland Berger Tech Ventures
Paris Office, Western Europe
+33 6 6916-9769