VivaTech 25 Day 2 – League of Nations

Europe needs to walk not talk

• VivaTech is full of ambition and plans for Europe to become an AI superpower, but this will require immediate action and a level of risk taking and entrepreneurialism that Europe has historically not been very good at.
• This is a significantly larger VivaTech than I have seen in past years and it is not just Nvidia but much of Europe has sent their CEOs to make an appearance at the show and issue the rallying cry.
• Furthermore, the crowd is much younger than you normally expect to see at these sorts of shows and is also showing a much better gender balance.
• This is good news as it gives a sense that all parts of the technology ecosystem from the start-ups to the big players, are all keen to see AI and technology in Europe recover from its current lacklustre state.
• The vast majority of the show is state-sponsored, with almost all of the start-ups gathered by region, with some really far-flung regions such as the Pacific, Guinea, Brazil, Lebanon and El Salvador all making an appearance with a number of their own start-ups.
• In total, about half the floor is not European, with the country stands of non-European countries and the usual US and Chinese suspects, while the other half is made up of European country stands.
• France has taken this one stage further with Le French Tech having been split into at least 6 stands dedicated to different regions of France.
• All of these companies stand to benefit from an increase of AI infrastructure in Europe, and the promises have been made, but there is an undercurrent of uncertainty.
• Listening to a senior member of the German government responsible for digital development and Mistral, one did not get a sense that the market is screaming for AI compute like the USA and much of the rest of the developed world is.
• Instead, the commentary focused on the need to find customers and to convince established companies to stop hesitating and commit to filling the AI datacentres when they are completed.
• This is a strong contrast to the USA, where both Google and Microsoft missed their Q4 24 estimates for cloud because they could not build the data centres fast enough.
• It appears to me that Europe is worried that there will not be enough takers for the AI capacity once it is built, which on its own could be enough to cause the whole proposition to fail to live up to the expectations that are being set here at VivaTech.
• This, combined with Europe’s more conservative culture, is what leads me to wonder how much of the VivaTech talk and ambition will translate into real AI infrastructure being built.
• However, the tariff situation and the progress in the Middle East has made Europe realise that it needs to be self-sufficient and that it needs to take charge of its own intelligence as opposed to outsourcing it.
• Consequently, I am convinced that builds are going to happen, it is just a question of how much, how long it will take and what regulatory obstacles will get in the way.
• The main winners from this new sense of urgency are those who are already in Europe and already have products ready to go.
• Top of mind is Mistral AI to which all of the big names, including the president of France, are promoting as the leading AI model company for Europe.
• This is mainly because it is the only major model company in Europe, meaning that they didn’t have that much choice.
• The other is Nebius, which already has data centres in Europe, is building more and will be the first to bring the latest Nvidia Blackwell systems to European data centres.
• The net result is that I am more optimistic that Europe has received the memo and understands what it needs to do to catch up in AI and create a thriving AI ecosystem of its own.
• This optimism is tinged with caution as Europe’s aversion to risk and its regulatory environment could easily hinder and slow down the rollout that it badly needs.
• It is time to walk the walk as opposed to talk the talk.