Funding the AI economy: Strengthening Europe’s investment capacity
A new EU report, "Funding the AI Economy," examines the state of AI investment in Europe and offers recommendations to bolster its competitiveness in the global AI landscape. The report highlights the need to strengthen Europe's investment capacity, corporate engagement, and ecosystem connectivity to foster growth and retain control of valuable AI assets. This focus reflects the EU's strategic interest in digital sovereignty and its aim to become a global leader in AI development. The report reveals that while AI's share of European venture capital has risen to 27%, significant gaps remain compared to global competitors. Between 2020 and 2025, the US dedicated 34% of its €1.33 trillion in VC funding to AI, while Europe allocated 18% of €252 billion. Additionally, EU investors primarily fund early-stage AI startups, with their participation dropping significantly in deals exceeding €25 million. The implications of these findings suggest that Europe needs to attract more late-stage capital, especially from within the EU, to retain control over its AI assets. This includes encouraging greater corporate investment and fostering a more interconnected ecosystem, beyond the current concentration in a few major hubs. The EU is working to strengthen its position through the recently announced Scaleup Europe Fund and initiatives to attract global AI ventures.
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