Opinion: Europe’s VCs must embrace risk — or resign the AI era to US control

European artificial intelligence (AI) startups are facing a significant funding gap, potentially hindering their ability to compete globally, especially against well-funded US rivals. This disparity in venture capital investment threatens Europe's ambition for digital sovereignty and its capacity to lead in the rapidly evolving AI landscape. The current situation underscores a crucial juncture for the European Union, where fostering homegrown technological capabilities is paramount. Data reveals that only a mere 5% of global venture capital is currently raised within the EU, a striking contrast to the US, which commands over half of the market, and China, with 40%. The European Commission reports that despite substantial household savings, estimated at €1.4 trillion annually, a disproportionately small portion is directed towards innovative startups. This highlights a need for a fundamental shift in investment strategy within the European ecosystem. The consequences of this funding deficit could be far-reaching, affecting businesses, citizens, and policymakers alike. European companies risk falling behind in a global race for AI supremacy, while individuals could see their data and privacy increasingly controlled by non-European entities. For policymakers, this situation demands a proactive approach to boost investment, nurture a vibrant startup ecosystem, and safeguard Europe's digital future. To address this challenge, European leaders must consider initiatives aimed at encouraging risk-taking, streamlining investment processes, and creating a more supportive environment for AI innovation. The success of these efforts will determine whether Europe can truly become a global player in the AI era or if it will be relegated to a secondary role.