French artificial intelligence startup Mistral AI founder Arthur Mensch attends the Viva Technology trade show at Parc des Expositions Porte de Versailles on May 22, 2024 in Paris, France.
Chesnot | Getty Images Entertainment | Getty Images
Most of Europe’s best-funded generative artificial intelligence companies were founded by entrepreneurs with experience at US tech giants, according to a new report from venture capital firm Accel.
The report, produced in partnership with Dealroom, found that a quarter of 221 generative AI companies in Europe and Israel had previously worked at Apple, Amazon, DeepMind, Meta, Google and Microsoft.
This number increased to more than a third (38%) of the top 40 European and Israeli generative AI companies in terms of VC funding raised, and 60% of the top 10 generative AI companies in terms of levels financing.
Harry Nelis, a general partner at Accel, told CNBC that the tech giants are natural catalysts for new generative AI firms because those companies “leaned the most in AI and … have capabilities in terms of computation, in terms of data, when it’s about money.”
“They’re really smart in the sense that they saw how getting an early lead in this area could lead to a massive competitive advantage,” he said, adding that there was a “golden opportunity” for people with an “entrepreneurial mindset” to create their own genAI. businesses.
The best funded genAI startups in Europe
| Company | Founding country | Founding city | Total funds raised |
|---|---|---|---|
| France | Paris | 1.1 billion dollars | |
| Germany | Heidelberg | 641 million dollars | |
| France | Paris | 396 million dollars | |
| France | Paris | 335 million dollars | |
| France | Paris | 235 million dollars | |
| United Kingdom | London | 157 million dollars | |
| United Kingdom | London | 151 million dollars | |
| United Kingdom | London | 118 million dollars |
In its research, Accel defines generative AI as “the emerging frontier of artificial intelligence that uses models trained on big data media with content… to create something new instead of just analyzing existing things.”
Nelis noted that many of America’s biggest tech firms have already taken the first steps in artificial intelligence — and Europe is increasingly the focus.
Google bought British AI lab DeepMind in 2014, and the firm’s technology is now central to AI products including its Gemini AI generative tools.
Meta, Facebook’s parent company, opened a European branch of Fair, or Facebook AI Research, in Paris in 2015.
Many founders of notable AI startups developing generative AI tools come from Google, DeepMind and Meta.
For example, Microsoft-backed French startup Mistral counts Arthur Mensch, a former DeepMind AI scientist, as its CEO. Co-founders Timothee Lacroix and Guillaume Lample worked at Meta.
And French AI-backed company H, backed by Amazon, was co-founded by former DeepMind researchers Laurent Sifre and Karl Tuyls, and Charles Kantor, a former Stanford student.
Mistral has raised $1 billion in funding to date, according to Accel, while H, which is only a few months old, has already raised $235 million.
Google is the top producer of new generative AI startups in Europe and Israel, Accel said, with 11.3% of genAI companies having founders with previous experience at the tech giant.
Google-owned DeepMind is in second place, mining 5% of generative AI firms. Meta is third, producing 4.1%.
Accel noted that universities are playing a major role in creating generative AI startups. According to him, many European universities now serve as so-called “founder factories” that produce new startup founders.
More than a third (38%) of companies have at least one founder who holds or has held a position—eg, professor, researcher, or lecturer—at an academic institution.
Lourdes Agapito, co-founder of UK AI firm Synthesia – which uses generative AI to eliminate the need for physical equipment in video production – is Professor of 3D Vision at University College London.
She says her time at UCL helped her connect with like-minded AI innovators.
While at UCL, Agapito met Matthias Niessner, co-founder of Synthesia, and then founded the company with CEO Victor Riparbelli and COO Steffen Tjerrild.
“When I look back at the Synthesia founding team, what’s special about us is how we complemented each other so well in terms of expertise,” Agapito told CNBC via email.
Agapito said the London headquarters was another “key ingredient” behind Synthesio’s early success.
UK universities are the most popular study destination for generative artificial intelligence founders, research by Accel has found. The University of Cambridge produces the most generative AI companies, where 7.9% of founders studied.
France’s Ecole Polytechnique is the second highest academic startup factory in Europe, where 7% of generative AI founders studied.