Given all of the times we’ve talked about the French tech scene, it stands to reason that France would be involved in AI. The French President Emmanuel Macron recently used the prestigious Adopt AI Summit in Paris to call for not just France, but the whole EU to wake up to American dominance over AI technology (especially in light of the latest controversy surrounding Elon Musk’s AI assistant Grok and the spread of illegal images.)
France has long been the standard bearer for the European tech scene, and continues to innovate today so it stands to reason that France might have the best chance out of any country of truly competing with the United States, and offering alternatives to its dominance over vital AI tools.
The groundwork for AI innovation
France was always likely to be well positioned to compete on AI tech. Macron’s tenure as president has seen a deliberate and sustained policy of investment in tech companies, including a range of incentives and the creation of tech hubs. Since launching its national strategy for artificial intelligence in 2018 - well ahead of the curve - France has progressively scaled up investment and institutional support to accelerate research and deployment.
According to official data, France now boasts more than 1,000 AI-focussed startups, and is home to a robust network of research labs, AI institutes, and academic centres that rank among the most productive in Europe. Institutions such as Paris-Saclay University, INRIA and Sorbonne University are also contributing heavily to scientific publications and patents on AI, reinforcing the country’s research expertise.
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This long-term investment has also reaped rewards in terms of talent. France ranks near the top globally for the number of AI researchers and graduates trained annually, in fields relevant to both machine learning and data science. This talent pool is important not only for startups and research projects, but also for established companies and AI labs that are choosing to base all or part of their operations in France.
Strategic initiatives and investment
Macron’s government isn’t slowing down on AI investment, either. Major plans have been unveiled to support AI infrastructure and startups, with France announcing a staggering €109 billion investment plan for AI infrastructure projects at the Adopt AI summit, a programme described as one of the most ambitious sovereign AI efforts outside the United States and China.
This investment includes support for data centres, French-based cloud services, and partnerships between startups and established technology firms. Deals such as the one between French AI startup Mistral AI and global semiconductor firm ASML (worth around €1.3 billion) speak to Macron’s commitment to ensuring greater European sovereignty when it comes to tech, with cloud services being a prominent example. Recent outages to Amazon’s AWS and Microsoft’s Azure took out thousands of sites and services around the world, showing the extent to which America dominates online infrastructure.
While the government is committing new resources to AI growth, other institutions are also playing a key role. The public investment bank Bpifrance has deployed substantial capital to develop the AI sector and promote adoption by French companies, especially among small and medium-sized businesses. While not explicitly coordinated with the government, France is clearly committed to integrating AI throughout the whole business ecosystem, creating both the supply and demand for AI tech within France.
La French Tech comes of age
We’ve talked about it plenty before, but it’s hard to oversell the importance of the La French Tech initiative in the growth of French AI. The government-backed programme aimed at nurturing startups and scaling national innovation now encompasses a network of tech hubs across the country, including Paris, Lyon, Grenoble and Toulouse. These not only provide mentorship, funding access, community networks and international exposure, but are also centres for innovation, bringing together engineers, entrepreneurs, investors and researchers to build new technologies.
Paris in particular is getting major recognition as one of Europe’s biggest tech ecosystems. Data from Dealroom shows that the combined value of Paris-based startups has increased substantially in recent years, outpacing the growth of rival hubs and placing the city among the top five global tech ecosystems. While new tech startups are being born en masse, the French startup landscape itself is maturing, and attracting international interest and capital in generative AI, cloud services and data platforms.
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As well as its large number of graduates in computer science, mathematics and data science, France is also benefitting from the French Tech Visa, which aims to tempt international researchers and entrepreneurs away from the likes of Silicon Valley, particularly those emanating from elsewhere in the EU. Collaborations between French and EU universities and research institutions are also helping to establish a symbiosis between the French tech ecosystem and the cutting edge of AI science, making French companies increasingly competitive in fields like generative AI and industrial automation.
A real Brexit benefit?
Although France is leading in many respects, it’s far from the only European nation vying for the AI crown. Historically a strong centre for technology and finance, the UK has also made a major show of investing in AI research and innovation, with London predictably at the centre of investment. The capital continues to be a major hub for startups and venture capital, and British universities have been influential in early AI research.
Prime Minister Keir Starmer has tried to position the UK as an AI leader, partly thanks to its divorce from the EU, which has strict data privacy standards and measures against US tech companies. However, Brexit has also imposed practical limitations on sharing research, as well as removing the UK from EU-wide policy initiatives and cooperative frameworks. Programmes such as the European Innovation Council funding schemes and some regulatory harmonisation efforts are boosting the EU’s AI investment, positioning the whole bloc against the UK for European AI funding.
France sits squarely within this environment, and is actively shaping the EU’s AI strategy. President Macron has continuously advocated for a harmonised digital market, as well as an EU-wide legal regime for innovative companies. In his view, simplifying tech regulations while also sharing common frameworks can provide the best of both US deregulation and EU collectivism, helping companies across the bloc.
Opportunities and challenges ahead
Despite its strengths, France (and Europe more broadly) can’t ignore the dominance of the United States and China. American firms such as OpenAI and Google’s DeepMind have both a huge head start and significantly more resources, both in terms of investment and the massive datasets they have built up. Chinese firms also reputedly benefit from significant state backing, as well as a laxer regulatory environment around data protection, with training data harvested from across the web. Europe’s AI sector by contrast operates on a smaller scale, and its share of global AI patents remains modest compared with these superpowers.
Within that context, France’s strategy is aiming to differentiate Europe, rather than replicate success elsewhere. Instead of attempting in vain to outspend their US rivals, French policymakers and entrepreneurs are aiming to build an ecosystem that puts more emphasis on data privacy, regulatory conformity, and a more ethical approach to AI. This aligns with the EU’s broader AI Act, which is proposing risk-based regulation to protect citizens without preventing innovation.
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For all of this, there are potential pitfalls. An overly cautious approach from the EU might slow innovation, while heavy public investment needs to be weighed against incentives for private investment. French labour and compliance rules might also raise costs, and deter some startups from scaling rapidly. French authorities are working to mitigate this risk by improving access to things like computing infrastructure, as well as streamlining regulatory processes, and cultivating stronger international partnerships.
While competing with US tech is always a challenge, France is better positioned than most. The efforts of President Macron have already paid off in building a thriving tech ecosystem across the country, and this same ecosystem is already making strides in AI. What remains is for the EU to up its own game, and find the right balance between regulations and investment to let France unlock its true potential.
If you’re interested in starting an AI business in France or expanding to the EU, we can help. Euro Start Entreprises has helped thousands of entrepreneurs and businesses set up in France and elsewhere for nearly two decades. Read our Start a Business in France in 8 Steps guide to learn more about the process, or get in touch with us today to start your journey.
