Amid the AI boom sparked by ChatGPT, Europe's two largest economies, the UK and France, are fiercely vying for leadership as AI hubs.
Last week, Vivadatech, France's largest technology summit, was held in Paris, attracting over 150,000 attendees. Artificial intelligence was the biggest highlight. Attendees came from startups, established technology companies, and even the beauty and banking industries; "AI was on everyone's lips."
French President Macron is personally pushing for France to become Europe's AI hub. At Vivadatech, he stated, "I believe France is number one in AI on the European continent, and we must accelerate our pace."
Recently, a Paris-based startup, only four weeks old, announced it had secured over $100 million in seed funding to build the large language models and generative AI behind applications like ChatGPT. The founding members of Mistral AI, a French company, come from Google's DeepMind and Facebook's parent company Meta. CEO Arthur Mensch previously worked at DeepMind's Paris office, and the other two co-founders worked at Meta's AI lab in Paris.
Funding a young startup with no clients is a huge risk, but the French are channeling their adventurous spirit into this promising endeavor.
France to "Invest Wildly" in AI
Macron stated that France will invest "wildly" in the training and research of artificial intelligence. He said, "France is well-positioned in the field of artificial intelligence because it has access to talent and a lot of startups in AI technology."
Mistral AI is just one of them. The company expects to launch its first AI product next year and is currently valued at over €200 million. Mistral hopes to use the funding to build a "world-class team" and establish open-source models.
Currently, the United States and China still hold technological and scale advantages in the global competition for artificial intelligence. France hopes to narrow the gap and create two or three "global giants" in the AI field by investing more in it.
Within Europe, France also faces fierce competition in the field of artificial intelligence, especially from the UK. Last week, British Prime Minister Rishi Sunak boldly proposed positioning London as a technology hub for the AI industry at London Technology Week, urging industry practitioners to seize the opportunities presented by artificial intelligence.
Although its technology and market size lag behind the US, Europe is gaining a leading position in AI regulation. Last week, the EU's AI bill was passed by the European Parliament, clearing a major hurdle for its formal implementation. This is also the world's first regulation to broadly regulate artificial intelligence.
Both the UK and France are vying for the high ground in AI safety regulation. The UK has planned to hold a global AI security summit in the second half of this year to discuss how to mitigate these risks through international cooperation. In his speech at London Tech Week last week, Rishi Sunak stated, "We must not only make the UK the 'knowledge home' of AI, but also the 'geographical home' of AI safety regulation."
The UK hopes to maintain a balance between technological development and ethics while making AI a core part of its economic development. In March of this year, the UK chose to distribute AI regulatory responsibility among several different agencies rather than creating a new agency specifically responsible for regulating artificial intelligence technology.
France has also stated that despite competition among nations, the development of artificial intelligence technology requires global regulatory collaboration, including cooperation with the UK and the US. "I think fair competition between the US and Europe, and cooperation on some key devices, is beneficial to both sides," said French Finance Minister Bruno Le Maire during Vivattech. "On the regulatory front, I think it is crucial to have in-depth discussions with the US on the best way to regulate artificial intelligence."
Investing in the UK or France?
Industry insiders offer different opinions on the respective advantages of the UK and France in the field of artificial intelligence, and how Chinese AI companies should choose when investing in Europe. Denis Depoux, co-president of the global management board of Roland Berger, a Munich-based consulting firm, told CBN reporters, “I think Paris has significant advantages. Firstly, France has at least two AI-related initiatives with substantial government subsidies, and Macron is personally leading the development of artificial intelligence. France has a long history of emphasizing technology, and its science education is world-class, especially in mathematics. In recent years, France has invested heavily in cloud computing and quantum technology, and has seen the emergence of several large European IT service companies, such as Capgemini, Sopra, and Atos.”
Depoux believes that the UK is not without its advantages, particularly in its attractive tax and regulatory frameworks, and its suitability for areas such as the financial services ecosystem. However, Brexit has made it more difficult for the UK government to obtain funding from the EU.
“France can undoubtedly obtain more funding from the EU level, which further highlights and will expand France’s advantages,” he told CBN reporters. He also mentioned Germany, stating, "Germany is near perfect in traditional technologies and engineering, but it doesn't have a particular appeal for developing new technologies."
Junyi Zhang, managing partner at Oliver Wyman, a New York-based consulting firm, told CBN reporters, "The UK and France have different advantages. For example, in terms of language, the UK's advantage is definitely more significant, and compared to France, it has a larger pool of Chinese students studying technology. However, Brexit is indeed a 'hard blow' for investors."
Musk may already have a clear inclination
Currently, tech giants including Elon Musk have stated that they will consider investing and collaborating more in the technology sector in France. After meeting Musk at the Vivadatech conference, Macron posted a photo of the two of them on Twitter, writing in English, "Let's work together."
Last Friday, Musk also had lunch with Bernard Arnault, CEO of French luxury goods giant LVMH, at the Cheval Blanc restaurant, owned by the luxury goods group. The combined net worth of the world's two richest people exceeds $426 billion. Also attending the lunch were Elon Musk's mother, Maye, and Arnault's two sons.
"If France wants to gain a foothold in the field of artificial intelligence, it needs to leverage this technology to build upon its strong economic sectors, such as biotechnology or luxury goods," an investor familiar with France told CBN reporters.
The founder of a Chinese AI data technology company considering investment in Europe told CBN reporters, "After a comprehensive evaluation of investment factors in both London and Paris, we are now increasingly inclined to invest in France, mainly because the overall business environment in France seems more friendly to Chinese companies."
A recent report by Business France, titled "Foreign Investment in France Creates Jobs," shows that France is at the forefront of Europe in attracting R&D and innovation. In 2022, France attracted 144 R&D center projects from around the world in the manufacturing sector, an increase of 8% year-on-year. The report also stated that 64% of foreign investors believe that France is more attractive than other European countries in terms of technological leadership. "France is globally recognized as a hub of innovation, and R&D plays a vital role in the French economy. One-fifth of foreign R&D investment in Europe is in France," said Pascal Cagni, Chairman of the Board of Directors of Business France and France's Ambassador for International Investment, recently. "Global technology giants are increasing their investment in France year after year, which will also promote the transformation of the French economy."
According to reports, China continues to be France's largest source of Asian investment.
However, some industry insiders point out that France's development in emerging technologies such as AI is constrained by some external factors. "In many sectors, France is still dominated by large state-owned enterprises, and some bureaucratic phenomena still exist. The UK is better in these aspects," Zhang Junxian, a partner at PwC China, told First Financial Daily.
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