New report analyses GenAI startups in Europe and Israel

The report finds four recurring leaders of AI in the region, with the UK and France leading in quantity and funding of AI startups respectively.

A man interacts with artificial intelligence to optimize and automate computing.

A report published by venture capital firm Accel shows the state of affairs of Europe and Israel’s generative AI (GenAI). That type of AI is able to generate text, images, sounds, videos and other mediums based on datasets upon which it is trained. Four countries in the region are leading the pack, with the UK and France coming up as winners in their distinct categories. 

The UK leads with 30% of the 221 GenAI startups analysed, followed by Germany (14%), Israel (13%) and France (11%). The UK’s strong lead can be explained by a long tradition of tech and AI development over the last quarter century. UK universities have partnered with tech giants to create AI research hubs throughout the country, setting the perfect grounds for attracting AI talent. UK based AI giants like DeepMind, Microsoft and Meta, have seen many of their former employees go on to create their own GenAI startups. 12% of all GenAI startups surveyed in the UK had at least one founder who had worked at the British AI pioneer DeepMind, the report said. 

Despite coming in fourth place by quantity of GenAI startups, France comes in first in terms of funding at $2.29 billion. Next, at half of that, is the UK with $1.15 billion, Israel at $1.04 billion and Germany at $636 million. The funding boom is both a symptom and a cause of the country becoming a new AI hub for Europe. French universities such as École Polytechnique, Université Pierre et Marie Curie and École normale Supérieure have educated and given work experience to the many maths and engineering students starting GenAI startups. In return, this has led Google, Meta and Kyutai to open facilities in Paris to attract that potential.

Three of the region’s best funded companies are French, with Mistral, Europe’s competitor to OpenAI, raising over €600 million alone. Cooperation between universities and tech giants in Israel and Germany are also a main source of growth for their respective AI sectors.