With artificial intelligence poised to transform industries globally, the stakes surrounding this next wave of innovation are only getting higher. This has fueled an intense debate about the competitiveness of France and Europe in AI at a time when the U.S. and China are marshaling massive resources in an attempt to dominate the future.
At this crucial moment, it is essential to have clear benchmarks of the French and European AI ecosystems. That is why Revaia, Galion.exe, and Chausson Partners have partnered to produce, "The French AI Report 2024: Key Challenges, Financing Trends, and Emerging Champions," a comprehensive overview of the nation’s AI landscape that maps over 400 startups and examines critical trends shaping the sector's development.
We are releasing this report just ahead of the AI Action Summit in Paris to underscore the urgency for France and Europe to consolidate their AI strategies and accelerate their pace in a rapidly evolving sector. The report outlines France's strengths and identifies key areas where the nation should invest to build on its momentum.
The report draws on insights from leading voices across France's AI community, including entrepreneurs, researchers, corporate executives, and investors. It also includes a robust analysis of funding and startup data to provide quantitative insights into the state of play.
On the whole, this analysis reveals a maturing ecosystem with vast potential.
Europe is attracting strong investment with AI now comprising 20% of VC funding and deal sizes commanding significant premiums over traditional software investments. The UK, France, and Germany lead funding activity, with efforts between European and US investors driving innovation and startups across diverse verticals like health, climate, AI infrastructure, Horizontal AI applications, and Vertical AI applications. This diversity suggests a robust foundation for future growth, with French companies pursuing innovation across multiple fronts rather than concentrating on a few narrow domains.
To accelerate this dynamism, the French AI ecosystem must move forward by expanding late-stage funding, fostering open-source innovation, ensuring access to high-quality and diversified data, addressing energy efficiency, navigating the global talent race, and enhancing academic-industry collaboration to strengthen talent pipelines.
France and Europe have an opportunity to demonstrate that it is possible to scale innovation while maintaining a strong focus on ethical standards.
Funding
When it comes to funding AI startups, the earliest stages are the strongest
in the European AI ecosystem.
Public and private AI investments across Europe are increasingly directed toward seed and Series B rounds. The UK is the top recipient, followed by France and then Germany. Median deal sizes command premiums of 1.5 to 4 times over traditional software investments.
Within these significant European capital inflows into AI, U.S. investors contributed 50% of late-stage funding and 20% of early-stage investments, underlining their pivotal role in the ecosystem. Most funding is channeled through traditional VCs, corporate venture arms, and public institutions, fostering innovation while supporting AI's development and adoption across diverse sectors.
France has emerged as one of Europe’s key hubs for AI talent, supported by world-class universities, a burgeoning startup ecosystem, and public policies aimed at fostering AI innovation. That has attracted robust funding from domestic and international investors, especially at the earliest stages.
AI funding in France is increasingly collaborative, with traditional VCs, corporate investors, and public institutions joining forces to foster innovation. These partnerships are enhancing both the development and adoption of AI technologies, creating a more resilient and interconnected ecosystem.
France’s capital flows into AI mirror broader European trends with a focus on early-stage activity, particularly in Seed and Series A rounds, with 2024 witnessing standout deals like Mistral AI’s $640 million Series B. Local investors dominate the early stages, whereas U.S. investors drive later-stage rounds. Between 2020 and 2024, U.S. investors accounted for 62% of Series D or later AI funding.
Emerging AI Leaders
France’s AI ecosystem is marked by its diversity, with startups tackling
challenges across a broad range of verticals. Generative AI is found across
these different sectors, reflecting its rapid global adoption.
The report tracked more than 400 emerging AI startups and highlights five main sectors driving innovation:
1. AI Infrastructure: This sector provides the technological foundation for AI to thrive, including cloud computing, development frameworks, as well as Agents startups. Companies like Mistral, Poolside, and Adaptive ML are advancing the infrastructure layer, enabling improved scalability and performance for AI applications. This sector attracted almost €1.3bn in funding in 2024.
2. Horizontal AI Applications: These are solutions that can be applied across multiple industries, either as key technology enablers or as solutions for enterprise departments. Notable players include Photoroom, Pivotapp, or Zeliq. This sector raised over €270m in funding in 2024.
3. Vertical AI Applications: Focused on specific industries, vertical AI solutions address domain-specific challenges. From Finance to Manufacturing and Logistics, this section has the highest concentration of emerging startups, reflecting the rapid proliferation of sector-specific value creation initiatives, such as Animaj, Deepomatic, or Outsight. Early-stage startups in this sector raised over €120m in 2024, excluding health & climate focus.
4. Focus AI x Health: Highly prolific, this sector is dedicated to improving healthcare outcomes through AI innovations, such as diagnostics, personalized medicine, and operational efficiency. Companies like Owkin are pioneering predictive modeling for medical research, helping clinicians make data-driven decisions. This sector is well funded, with over €220m raised by players in 2024 alone.
5. Focus AI x Climate: With a focus on sustainability, this sector uses AI to tackle challenges like energy efficiency, carbon emissions, or water management. Examples include Kayrros, which provides insights into environmental changes through AI-powered satellite imagery analysis. Though less funded than health, this sector is prolific in number of players; it raised over €80m in 2024.
Unlike the US, which is clearly leading AI innovation in sectors like social media or autonomous vehicles, innovations in France are distributed across many industries, with no sector yet where France is an obvious leader.
This mapping found that there is a robust number of startups in the health and climate sectors, signaling that perhaps these may be ripe for more targeted support to build champions in these high-potential verticals.
Building on Strengths: A Path ForwardSince then, the nation has made tremendous strides toward making it clear that France is fertile ground for launching and scaling an AI startup. So much so that many of those international players who were once poaching talent have now opened offices or labs, making important contributions to the ecosystem.
This progress should be recognized and celebrated. At the same time, it’s important to not become complacent. Resources are flooding into AI around the globe, and France and Europe must act decisively to seize the moment.
Our research identified several key areas that warrant renewed focus to ensure that France and Europe enhance their competitiveness:
Sufficient funding: There is a greater need for domestic capital at all stages to ensure sustainable growth and prevent talent and company migration. Initiatives like Tibi in France have made important progress in late-stage funding. But as valuations and capital costs rise, startups will need access to huge amounts of capital.
Retaining top-tier talent: Strengthening academic-industry collaboration and reducing barriers for part-time research roles can mitigate resource gaps and foster talent mobility.
Computational power: In the global AI race, talent and resources dictate the pace of innovation. Access to computational power is another critical bottleneck. In a field where progress is increasingly driven by large-scale models requiring massive computational resources, many French startups struggle to compete. The report highlights the role of government-backed initiatives like the GENCI supercomputing program but notes that these efforts must scale further to meet the growing demands of the industry. Public-private partnerships could play a pivotal role in bridging this gap.
Collaborations between academia, industry, and government: The report highlights the success of partnerships that bring academic expertise into real-world applications, creating a virtuous cycle of innovation. As AI becomes increasingly central to economic and societal progress, France’s ability to lead will depend on its capacity to integrate these efforts into a cohesive and forward-looking strategy.
Ethical balance: France's efforts to embrace an ethical approach to AI can offer an important blueprint for other nations. But it also raises concerns about velocity. Balancing ethical concerns with the unparalleled pace of innovation in AI is a major challenge.
The report’s ultimate message is one of cautious optimism: France has the tools, talent, and ambition to lead. In doing so, it can inspire not only a national AI renaissance that would rejuvenate the nation’s economy but also a broader European resurgence in technological innovation.
The choices made now will determine not only France’s role in the global AI race but also Europe’s ability to assert its relevance in one of the defining technologies of our time.