The New Age dramatic tale of a college student striking gold on a billion-dollar idea shortly after putting on his graduation gown has been a very American dream for most of the 21st century.
While Europe lagged behind the technology boom, the founders of Google, Meta, and Microsoft, who were still in control, began their journeys from sweaty college dorm rooms at Harvard and Stanford.
However, several exciting European startups are proving that they will not be left behind in the AI revolution, with more capital now flowing through Paris than anywhere else on the continent.
According to Dealroom data Analyzed by venture capital fund AccelFrench AI startups are the most funded among their European and Israeli counterparts.
Companies like Mistral, Owkin, and Hugging Face have helped French AI startups raise $2.3 billion in capital to propel their thriving operations, more than their competitors in other European hubs like the UK and Germany.
The data confirms that universities in Paris are the source of new technological power in France.
The intelligence of the Parisian book
Arthur Mensch, the 31-year-old CEO of AI unicorn Mistral, is perhaps the most exciting face of France's booming tech sector, overseeing the rapid rise of the large language modeling group to a $6 billion valuation.
But he started, as did most of his fellow French founders, at a university in Paris.
About 57% of the French founders came from the École Polytechnique, a science and engineering-focused college based in the southern Paris suburb of Pallissou.
Mensch was one of them, as he studied applied mathematics and computer science at the university between 2011 and 2015.
The co-founder of Mistral is also a former Google DeepMind employee. He's in good company, as Accel analyzed 11% of founders starting at Google.
The Pierre and Marie Curie Campus of the Sorbonne and Telecom Paris are other major universities in the capital where today's founders cut their teeth.
Meanwhile, the École Normale Supérieure is where Tech graduates go to grow up. About 29% of French founders gained practical experience at university, which is more than the American schools of Stanford, the Massachusetts Institute of Technology, and artificial intelligence giants such as Google and Facebook. Mistral Mensch earned his PhD at the University in the 5th arrondissement of Paris before moving to Google.
The move towards AI capital is becoming popular across Europe. While French startups receive the most funding, the UK has the highest number of AI startups out of the 221 companies identified by Dealroom.
Universities become institutional factories
It was not always the case that Europe's universities were the birthplaces of founders of multi-billion-dollar companies. Entrepreneurs have taken to pointing out the cultural mismatch that means innovation rarely starts behind university walls on the eastern side of the Atlantic.
But things are changing thanks to the boom in artificial intelligence.
Accel partner Harry Nelis has been investing in Europe's tech ecosystem for two decades, and says the landscape has “changed dramatically” in recent years.
He credits “institutional factories,” in other words, startups that create new startups.
“Initially, we were investing in entrepreneurs who belong to large French companies, who had never done this before.
“As a result, they will have to reinvent the wheel several times,” Nellis says.
Now, Europe's mature ecosystem is home to several such founding factories, the most important of which are universities, along with Meta's establishment of the Fundamental Artificial Intelligence Research (FAIR) center in Paris in 2015.
Because AI relies on deep technology and foundational models, Nellis says it's not surprising that 38% of European founders held positions at academic institutions.
“This is something really new for the AI wave. This wasn't the case for the e-commerce wave, for example, or the enterprise software wave; it's something really unique for AI,” he says.
However, there is a looming threat from France's relatively chaotic political wing.
President Emmanuel Macron last week called for elections that could bring the country's extreme left or far right to power.
This news sent the French stock market plummeting, allowing the London Stock Exchange to regain its crown as the largest in Europe.
This in itself is worrying enough without remembering Macron's pro-business stance.
The president was at the forefront of the “Choose France” investment campaign, which allowed $16 billion in capital from technology giants such as Microsoft and Amazon to flow into the country. The turbulent French political scene could lead to a change in priorities.
However, Nellis believes that even a historic shift toward France's ruling class cannot stem France's hard-won superiority in artificial intelligence.
“I think the AI wave will be so strong in itself that politics won't really matter much.”
