French founder of artificial intelligence startup Mistral AI, Arthur Mensch, attends the Viva Technology show at the Parc des Expositions Porte de Versailles in Paris, France, on May 22, 2024.
Schasnot | Getty Images Entertainment | Getty Images
Most of the best-funded generative artificial intelligence companies in Europe were founded by entrepreneurs with experience at US tech giants, according to a new report from venture capital firm Accel.
The report, prepared in collaboration with Dealroom, shows that a quarter of the 221 generative AI companies in Europe and Israel previously joined Apple, AmazonDeepMind, Meta, Googling And Microsoft.
That figure rose to more than a third (38%) for the top 40 European and Israeli generative AI companies in terms of venture funding raised, and 60% for the top 10 generative AI companies in terms of funding levels.
Harry Nelis, general partner at Accel, told CNBC that tech giants are natural catalysts for new generative AI companies because those companies are “the most forward-leaning in AI and … have the capabilities when it comes to computing, if it's about data, when it comes to money.”
“They are really smart in the sense that they have seen how an early lead in this area can lead to a huge competitive advantage,” he said, adding that there is a “golden opportunity” for people with an “entrepreneurial mindset” to build their own to make genAI. companies.
Europe's best-funded genAI startups
| Company | Founding country | Founding city | Total funding raised |
|---|---|---|---|
| Mistral | France | Paris | $1.1 billion |
| Alef Alpha | Germany | Heidelberg | $641 million |
| Hugging face | France | Paris | $396 million |
| Owkin | France | Paris | $335 million |
| H | France | Paris | $235 million |
| Synthesis | United Kingdom | London | $157 million |
| Stability AI | United Kingdom | London | $151 million |
| PolyAI | United Kingdom | London | $118 million |
Source: Accel
In its research, Accel defines generative AI as “an emerging AI frontier that uses models trained on a large data set of content media… to create something new rather than just analyzing existing things.”
Nelis noted that many of the largest US tech companies have already taken early steps in AI – and Europe is increasingly receiving attention.
Google bought British AI lab DeepMind in 2014, and the company's technology is now key to AI products, including the Gemini generative AI tools.
Meta, the parent company of Facebook, opened the European branch of Fair, or Facebook AI Research, in Paris in 2015.
Many founders of leading AI startups developing generative AI tools come from Google, DeepMind, and Meta.
For example, Microsoft-backed French startup Mistral has Arthur Mensch, a former DeepMind AI scientist, as CEO. Co-founders Timothee Lacroix and Guillaume Lample both worked at Meta.
And French AI company H, which is backed by Amazon, was co-founded by former DeepMind researchers Laurent Sifre and Karl Tuyls, and Charles Kantor, a former student at Stanford University.
According to Accel, Mistral has raised $1 billion in funding to date, 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, according to Accel, with 11.3% of genAI companies having founders with previous experience at the tech giant.
DeepMind, which Google owns, comes in second, with 5% of generative AI companies. Meta is in third place and produces 4.1%.
Many AI founders are also professors
Accel noted that universities play an important role in creating generative AI startups. Many European universities, it says, now act as so-called 'founder factories' producing new start-up founders.
More than a third (38%) of companies have at least one founder who holds or has held a position – such as professor, researcher or lecturer – at an academic institution.
Lourdes Agapito, co-founder of British AI company 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, before founding the company with CEO Victor Riparbelli and Chief Operating Officer Steffen Tjerrild.
“When we look back at the founding team of Synthesia, what is special about us is that we complemented each other so well in terms of expertise,” Agapito told CNBC via email.
Agapito said the London operation was another “key ingredient” behind Synthesia's early success.
UK universities are the most popular study destination for generative AI founders, Accel research shows. The University of Cambridge produces the most generative AI companies; 7.9% of the founders studied there.
France's Ecole Polytechnique is the second highest academic founder factory in Europe, with 7% of Generative AI founders having studied there.
