You only have a minute? Here are 3 key takeaways from the article:
• Europe has seen remarkable growth in the field of AI, with a more than 10-fold increase in active AI roles over the past decade, reveals Atomico’s latest State of the AI report. European technology.
• European technology investments in 2023 are expected to reach $45 billion, a significant drop of 55% from the record $100 billion invested in 2021.
• Europe lags behind the United States on a GDP-adjusted basis, with South and Central Eastern Europe (CEE) in particular showing a pronounced gap in this disparity.
Over the past decade, Europe has not only seen a 10-fold increase in the number of active AI roles, but also boasts a larger resident population of highly skilled AI professionals compared to the United States, according to the latest Atomico report on the state of European technology. watchbased on data from deal counting platforms and a survey of more than 4,100 startups, founders and venture capital firms.
Although many of these AI professionals hold positions at US-based technology companies that have built a significant presence in AI research in Europe, such as Alphabet or Meta, companies such as Mistral AI, based in France, illustrate how European AI talent pools have become the main destination for founders and talent in the sector.
The report also shows that generative AI is booming in Europe and that investors are betting big on AI. Data from the report indicates that by the end of the third quarter of 2023, European AI companies had raised 11 fundraising rounds of $100 million or more, compared to 37 fundraising rounds for US AI companies during the same period.
However, European AI companies have yet to raise billions or multi-billions of dollars compared to the fastest growing American AI companies, such as OpenAI or Anthropic. For example, while Europe now regularly experiences investment cycles of $100 million or more, and even up to $0.5 billion, this pales in comparison to the $10 billion investment of Microsoft’s dollars in OpenAI, the report adds.
Investment in AI in Europe has also defied the broader slowdown, with total investment in 2023 on track to approach last year’s record $8.7 billion, the report said. CEE companies for example, as already shown in the article in The Recursive State of AI Reporthas attracted $4.2 billion in funding over the past three years, demonstrating growing interest from high-profile international investors.
Additionally, the report shows that AI is the most popular sector for funding rounds below $5 million.
Total invested capital for 2023 will reach $45 billion, down more than half from 2021
According to Atomico’s report, the total amount of capital invested in European technology in 2023 is on track to reach $45 billion, a drop of more than half, or 55%, from the 2021 record , when investments exceeded $100 billion.
The decline is also visible compared to 2022, when investments amounted to $82 billion. The reasons for these developments range from many early-stage companies delaying fundraising, as well as the noticeably slower pace of deployment from investors,
However, the report also highlights that 2023 is on track to become the third biggest year on record in terms of total capital invested, and is on track to reach a volume four times that seen 10 years ago. years in 2014.
Additionally, the report also shows that one-year venture capital returns are now largely negative in Europe and the US, due to increased down cycles, delistings and markdowns reflected in the data.
The slowdown in capital invested in private European technology companies is evident across the region, with significant annual declines recorded in all major European countries between 2022 and 2023.
Only a small number of countries, including Romania and, with Lithuaniaand Luxembourg recorded a year-on-year increase in total capital invested in 2023.
According to the report, tThe UK maintains its top spot with a planned invested capital of $12.7 billion, followed by France ($8.0 billion) and Germany ($7.8 billion). The Netherlands ($2.1 billion forecast) returned to the top five, displacing Switzerland ($1.7 billion) to join Sweden ($1.7 billion) to round out the top five countries in terms of capital invested in 2023.
The report also shows that, on a GDP-adjusted basis, Europe continues to lag behind in terms of its share of total capital invested globally in technology. Thus, the projected total of $45 billion of capital invested in the region will equate to around 18% of global investment volumes, while the United States, which accounts for 25% of global GDP, holds a massive 46% share. of the total capital invested.
As the report highlights, this gap is particularly visible in Southern and Central and Eastern Europe.
European technology is constantly creating new jobs
Even in the face of challenges in capital markets and facing indicators such as layoffs that can impact the perceived attractiveness of joining the sector, the report shows that European tech has not experienced an exodus of talent , but new positions are constantly being created.
In this regard, the report shows that in five years, European technology has grown its workforce from just over a million employees to more than 2.3 million today.