Do Not Underestimate Europe’s AI Innovators

Fred van Beuningen

Oct 17, 2019

As published on 

Pundits say that Europe is losing the race for artificial intelligence (AI). Their perspective is suspiciously dire and misses an obvious point: Europe is not the U.S. or China.

Our AI champions will not resemble Google and Facebook or Baidu and Tencent—and that is for the best. Europe will not tolerate AI innovators who violate individual privacy or further government coercion.

As an AI and robotics investor based in Delft (Netherlands), I acknowledge the concerns about European AI. However, I meet regularly with entrepreneurs who ought to give alarmists pause. Our AI founders are not media superstars touting multibillion-dollar valuations, but their potential should be not underestimated, least of all by their American and Chinese competitors.

In response to the pessimists, I’d like to convince you that the seeds of an AI revolution are planted in Europe. But like any seed, it must grow from the ground up, not from the top down.

The AI Panic

When AI investor Kai-Fu Lee said the EU isn’t even in the running for the bronze medal in AI, he was preaching to a growing choir—of which I am not a member. “Europe is not keeping up” with North American and China, says an open letter from the ELLIS Society, which seeks to create a research and entrepreneurial network for European AI.

CLAIRE, another research network, says that “If Europe were to fall behind in AI technology, we would be likely to face challenging economic consequences, academic brain drain, reduced transparency, and increasing dependency on foreign technologies, products and values.”

And on it goes. The European Council on Foreign Relations warns that “Europe has not yet taken all the steps it needs to benefit from these advances or to protect itself from AI’s potentially dangerous aspects.” Geopoliticians worry that EU militaries see little need for AI strategies. Meanwhile, though Vladimir Putin claims that the dominant player in AI “will be the ruler of the world.”

The EU seems to be losing the AI race, but there is no finish line, and no one has defined what it would mean to catch up. Meanwhile, our AI innovators fly under the radar, uncelebrated and often underfunded.

Pockets of Excellence

Europe has pockets of AI excellence. I happen to live near one at Delft University of Technology in the Netherlands. The UK, Germany, France, and Spain are home to the bulk of Europe’s AI startups. The problem is that most European AI startups have dug themselves into niches. They seem to copy the Silicon Valley model, which commands innovators to define a startup as the singular solution to a singular problem. That, perhaps, is why the world has more than 7,000 marketing technology companies.

One-trick companies limit their potential. Imagine if Google had stuck to search only, or if Amazon only sold books. They would not be the world-shifting AI pioneers they are today.

Therein lies the concern for Europe. Although companies must hyperspecialize when they first attack the market, they need the ambition—and capital—to expand. Otherwise, their best financial outcome is to cash out quickly through an acquisition by an American company.

The task, then, is not just to fund AI innovation. It is to fund AI technologies that have a pathway from their beachhead to a diversity of applications and markets. A few startups have pursued that strategy.

Multidisciplinary AI

In no particular order, I’ll present several startups that seem to grasp the future of AI. I presently have no financial ties to these firms. They exemplify the multi-industry AI strategy that we need more of in Europe.

Let’s start with Rotterdam-based Widget Brain. Companies entering the AI game used to have two options: hire expensive data scientists to make homegrown AI, or buy conventional software with built-in, black-box AI. Instead, Widget Brain builds applied AI on top of its “Algorithm Factory,” which trains, runs, and manages its AI services in the cloud and delivers “AI-in-a-box” to the market.

Widget Brain’s first successful AI service predicts labour needs and automatically schedules employees according to local labours laws. That same Algorithm Factory now runs pick/pack optimization-as-a-service to reduce pick times for online retailers. The company is also developing AI services to predict breakdowns and automatically schedule preventative maintenance.

Widget Brain isn’t stuck in one industry because it figured out how to deliver AI at scale. However, Widget Brain will have to demonstrate that AI in a box delivers value to large organizations sceptical of this approach

UK-based Graphcore likewise has multidisciplinary value. It develops semiconductors called intelligent processing units (IPUs) that accelerate AI and machine learning applications. From robotic factories and autonomous vehicles to emergency room technologies and cybersecurity, plenty of use cases demand faster processing speeds than what conventional chips offer.
Hence, Graphcore’s $1.7 billion valuation. As The Economist notes, Graphcore is well-positioned for an AI chip industry projected to be worth $30 billion by 2022.

This roundup owes a nod to Germany, which has as many patents for autonomous vehicles as China and America combined. By one count, Germany has 71 autonomous driving startups deploying €180 million in venture capital funding.

While U.S. companies worry about how to show advertisements in your self-driving car, Germany’s Enway is developing autonomous vehicles for street cleaning, waste collection, agriculture, and construction. You’ll find their autonomous street sweeper in the pedestrian zones of Darmstadt, Germany.

Again, I highlight Enway because it’s not stuck in one niche. It recognizes that one autonomous vehicle platform can transform multiple industries.

Seed to Tree

Europe has the seeds for an AI revolution, though pessimists may accuse me of not seeing the forest for the trees. It’s a faulty analogy. In the startup world, the forest of early-stage companies largely dies out, leaving a few trees standing to seed the next generation. Companies like Widget Brain, Graphcore, and Enway show the potential for European AI champions to stay independent and nourish a wide range of industries.

By the numbers, Europe is trailing the U.S. and China in AI. But let’s not discount our bottom-up innovators. It is they, not just Europe’s universities, industrial juggernauts, and public research consortiums, that will develop a competitive AI economy.

We have untapped talent, capital, and collaborators spanning the private and public sector. Let’s fund AI projects that will be too valuable to sell off to Silicon Valley.