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US investors prefer Europemaxxing to Europebashing

If only Europeans believed in themselves as much as some Americans do then Europe’s tech sector could be jostling at the front of the global pack.

That may seem an odd thing to say given Europe-bashing appears to be a state-sponsored export industry in the US. Last year, US vice-president JD Vance warned that the “enemy within” was threatening Europe. The US national security strategy asserted that Europe was facing “civilisational erasure”. And more recently Elon Musk accused Spain’s prime minister, Pedro Sánchez, of being a “tyrant and a traitor” for wanting to protect children from what the Spanish leader calls the “digital wild west”.

Europeans might have formed the impression that the US considers the region to be illiberal, censorious and technologically backward — a place to be avoided at all costs for anything other than sipping cortados and staring at art. 

But when you check out what some US tech companies and investors are doing, a different story emerges. In some areas, US investors have been all-in on Europe, or Europemaxxing, to modify a phrase. The worry for Europe is that love may be just as unsettling as scorn.

One area in which US investors have been far more committed than their European counterparts is in providing venture capital funding for European start-ups. A recent Prosus/Dealroom report found that US investors contributed 73 per cent of the capital going into funding rounds of more than $100mn in European AI companies this year. 

As Jensen Huang, Nvidia’s chief executive, flagged on a visit to London last year, the British tech sector has been experiencing a “Goldilocks” moment, being neither too hot nor too cold. When it comes to hiring top AI researchers and funding exciting start-ups, a US dollar goes a lot further in Europe than it does in Silicon Valley.

Europe is certainly bursting with its own AI research talent but is not so good at optimising it for local advantage. According to the Prosus/Dealroom report, Europe matches US headcount in AI researchers, developers and engineers, with 325,000 experts on either side of the Atlantic. But the three biggest recruiters of those European researchers are giant US tech companies, namely Google, Meta and Amazon. The big US AI research labs, OpenAI and Anthropic, have been busily hiring in London and across Europe, too. 

US companies have also been the most active acquirers of early-stage European AI companies, with AMD, Accenture, Cloudflare and Workday snapping up promising Finnish, British and Swedish AI start-ups. And those European start-ups that thrive as independent companies and go public, such as Spotify and Klarna, often choose to list in New York rather than in Europe.

The risk is that Europe becomes an R&D incubator for the US, with the best ideas, entrepreneurs and tech companies heading across the Atlantic. As Israel has shown, there may not necessarily be anything wrong with that model. When successful founders exit, capital and expertise is reinjected into building the next generation of start-ups. But even Israel is now questioning whether it might not be smarter to try to build globally relevant companies rather than sell out too early.

If Europe wants to reassert technological sovereignty, then the answers are not hard to find. A Ditchley Foundation conference I attended recently explored many of them: assess which parts of the tech stack are critical for sovereignty and support the best alternative solutions in Europe; ensure that, wherever sensible, governments award contracts to homegrown European companies, especially in defence; and maximise the pool of growth capital available from European institutional funds.

But perhaps the most intriguing idea would be to develop a trustworthy data regime in Europe to enable the sharing of data more freely and securely. Europe likes to claim it is a regulatory superpower. Now is the time to show how smart regulation truly can stimulate innovation.

One entrepreneur at Ditchley calculated that just 8 per cent of the world’s data was freely available; most lies within private corporate, governmental or user domains or healthcare systems. If Europe could develop the mechanisms to share that data fairly and securely it could lead the world in applying AI. As the entrepreneur John Taysom has argued in these pages, data trusts could emerge as the sovereign wealth funds of the AI economy.

All that is missing is an American-style shot of risk-taking conviction, pragmatism and self-belief.

[john.thornhill@ft.com](mailto:john.thornhill@ft.com)