Xavier Niel, certainly one of Europe's leading technology investors, believes the region can reach creating leading artificial intelligence firms, even without the multibillion-dollar capital raisings of US competitors – so long as founders usually are not tempted to money out too early .
“I believe we are able to do great things with a couple of hundred million euros,” said the French billionaire, who made his fortune within the telecommunications sector with the operator Iliad and is now investing widely in start-ups. This includes support for Paris-based AI group Mistral, which reached a worth of €6 billion inside a yr of its founding.
“Europe can create competitive AI models today,” he said in an interview with the Financial Times. “But in the following two or three years, (success) is determined by the variety of initiatives and the power of those that are the true geniuses – those who construct the most effective firms – to not be swallowed up or sell too quickly. “
This optimism about European technology is notable provided that the continent has lost out to U.S. and Chinese giants in previous waves of disruption from the web to social networks, leaving the region to thrive through regulation slightly than through Innovation has excelled.
Niel's view carries weight as a prolific technology investor with extensive contacts in Silicon Valley, who also sits on the boards of personal equity group KKR and TikTok owner ByteDance.
In Europe, there are few players that may compete with firms like OpenAI and Google, which develop so-called large language models that underlie AI applications. Some hopefuls like Aleph Alpha from Germany have thrown within the towel.
Despite his optimism, Niel warned that the region could be “downgraded” in the worldwide economy if AI innovation didn’t take off. It would depend on US and Chinese tools designed without their “values” resembling privacy and transparency. “If Europe doesn’t get this right, it would develop into a really small continent that will probably be abandoned for a couple of generations,” he said.
France is home to certainly one of the remaining hopes for AI models: Mistral, founded last yr by a trio of scientists from Google and Meta. Armed with over $1 billion in funding, Mistral has developed a comprehensive language model that it says is leaner and more capital efficient than better-funded competitors.
Although Niel insisted that his message about not selling out too early was aimed toward European founders basically, this is especially true for Mistral. “Founders need to appreciate that if a bigger company offers to purchase them at X value, it’s probably price two or thrice more.”
Niel has up to now supported the AI ecosystem in France with investments of around 500 million euros and said he could eventually deploy billions.
A nonprofit research lab called Kyutai goals to develop open-source AI models, a project joined by former Google CEO Eric Schmidt. Niel's cloud infrastructure company Scaleway operates certainly one of the most important supercomputers within the European private sector.
Niel makes €15 million in early-stage investments annually through his Kima Ventures fund and in addition supported the New Wave fund, where he recently intervened to finish an influence struggle between founders.
Given the standard of its math and engineering institutes and the undeniable fact that the tech giants have yet to ascertain their dominance, there remains to be time to call AI winners in Europe, Niel said. Furthermore, the dimensions of the chance in AI implies that “it won’t be one company that can win, but dozens and even lots of,” he said.
“Sure, the world moves faster now, the resources are greater. But somewhere on the earth there’ll all the time be two smart kids working in a garage with a technological vision or a brand new idea.”
Niel was once such a baby, because the 57-year-old iconoclastic entrepreneur recently recounted in a memoir-like book of interviews titled (“A powerful urge to cause trouble”).
As a young person, he dabbled in hacking and briefly became an asset for France's domestic intelligence service because it arrange its first cyber unit. They had him hack then-French President François Mitterrand's phone so the agency could get a bigger budget, the book says.
Niel's first lucrative business was running adult-only sex chat services on Minitel, a rudimentary French network that predated the Internet.
But his real breakthrough got here in telecommunications, when he founded Iliad as a low-cost provider in 1990 when France opened the market to competition. It went public in 2004.
Just a couple of months after the IPO, Niel was arrested on suspicion of asset embezzlement and pimping in reference to investments in sex shops that he had made with a partner from his Minitel days.
He spent a month in prison and was later convicted of the lesser charge. Niel wrote that the judge gave him advice that he never forgot: You can skip the road between right and incorrect, but never cross it.
Excited by Iliad's success, Niel invested in technology, real estate and media resembling the newspaper Le Monde. Iliad is now private and has expanded to around 20 countries, most recently Ukraine. In Paris, Niel built the world's largest startup incubator called Station F and opened a free programming school.
As his projects multiplied, Niel took on a task of ambassador for European technology. When Pavel Durov, the billionaire creator of the messaging app Telegram, was arrested and interrogated in France for alleged complicity in criminal activity, his first call was to Niel.
“When I went to prison, everyone disappeared on me. So if a friend in France runs right into a problem, I’m not the form of one who doesn’t pick up the phone.”
In September, Niel joined the board of ByteDance, the Chinese parent company of TikTok, which is under scrutiny within the U.S. and Europe over privacy, misinformation and security.
US President Joe Biden has signed a law banning the platform on national security grounds if its Chinese parent company doesn’t sell itself by 2025. President-elect Donald Trump has said he could reverse the choice – an option Niel personally supports.
“I believe it will be positive for TikTok to live on within the US with its expert workforce. Positive for competition, for residents, for improving products,” he said.
“What worries me is that if TikTok comes under pressure, all other social networks, including American ones, will even come under pressure,” he said.
Niel said he had been “a long-time small investor” and thought being the one European on the board would help ByteDance’s plans to expand within the region.
“We are in a position to welcome them to Europe and help them invest.” . . and understanding who we’re, how we’re, (our) way of working,” he said. For them “it creates value, and for us it creates future-oriented investments in Europe.”
