Europe needs 21st century institutions to match 21st century technology. This applies to everything from regulators and national governments through to universities. The most valuable role European governments can play in AI development is by ensuring the right infrastructure is in place. Nathan Benaich Founder & General Partner, Air Street Capital This means building out public cloud capacity for startups, pushing universities to end their feudal spinout policies, and making it easier for people to establish venture funds. The big danger for Europe lies in giving in to its interventionist im- pulse. Regulating AI isn’t like regulating Airbus. Governments attempting to ‘guide innovation’ through large-scale legislation will slow down progress while empowering a small clique of US tech companies. Europe should avoid treating AI as distinct from any other tool or technology and instead take a cool-head- ed, context-dependent approach to assessing risk. Investors betting big on AI There has been no shortage of perspectives on Europe’s position in the AI race. Amidst the noise, it is easy to overlook the fact that the AI theme has actually hit a stride in Europe in recent years, with European AI com- panies consistently securing mega-rounds of $100M or more. In fact, this year will come close to matching the record set in 2021, despite the huge headwind of a steep drop in overall investment levels in Europe in 2023. As of the end of Q3 2023, European AI companies had raised 11 rounds of $100M or more, compared to 37 rounds by US AI companies over the same period. So far, however, European AI companies have not yet raised the type of billion-dollar or multi-billion-dollar rounds that have become crucial sources of 昀椀repower for the most important and fastest-growing US AI companies, like OpenAI or Anthropic. The multi-$100M+ rounds, however, are certainly beginning to appear in Europe. 145 | Companies