AI and Sovereignty: France Confronts Dependencies

AI, a Strategic Issue for France

Artificial intelligence (AI) has become an essential pillar of modern strategic infrastructures. For France, the question of technological sovereignty is no longer limited to the mere emergence of national champions. It now involves wisely choosing dependencies, mobilizing public procurement, directing capital flows, and protecting sensitive assets. This approach is crucial to ensuring the country's technological independence and security.

The Challenges of Investment in the AI Ecosystem

At the VivaTech event, three experts in finance and law discussed the complex topic of investments in the AI ecosystem. On June 17, David Chekroun, a law professor at ESCP, Cassandre Gosselin, digital innovation program manager at Bpifrance, and Julien Tanguy, CEO of the Lefebvre group, shared their perspectives. AI encompasses a vast chain of products and services, including rare metals, cloud computing, and large language models (LLMs). The notion of sovereignty varies among stakeholders, and investments involve both public and private funds. These discussions helped clarify the stakes and strengthen the participants' convictions.

Understanding Digital Sovereignty

Digital sovereignty spans several dimensions: production, capital, expertise, and data storage. Experts emphasized the importance of "managing dependencies," highlighting that it is impossible to be sovereign in all areas. David Chekroun pointed out resilience as a more operational concept that resonates particularly with Chief Information Officers (CIOs). Resilience is defined as the ability to absorb and manage shocks in the event of supply chain disruptions. Initiatives such as the digital resilience index, developed by the Institut Polytechnique de Paris, PSL, and ESCP Business School, illustrate this approach.

Sovereign Alternatives in LLMs

In the field of large language models (LLMs), sovereign alternatives are still limited. Mistral, a French company, is one of the few exceptions, although the quality of its responses is sometimes debated. Cassandre Gosselin defended Mistral, noting that Bpifrance signed a strategic partnership last May to integrate Mistral AI's general artificial intelligence into its operations. This partnership includes the deployment of the conversational assistant "Le Chat" for all Bpifrance employees. Since its first fundraising round in 2023, Mistral AI has been supported by Bpifrance to become a major player in the global AI ecosystem.

Mastering Response Quality

Julien Tanguy highlighted the importance of mastering response quality in the retrieval-augmented generation (RAG) approach. This technique connects an LLM to a precise database, allowing for contextualized AI responses. The Lefebvre group has developed GenIA-L, an internal artificial intelligence that relies on the group's vast database. This solution now accounts for two out of three sales, generating an annual recurring revenue (ARR) of 120 million euros out of a total of 600 million euros.

Legal and Financial Levers for Sovereignty

David Chekroun reminded that France has mechanisms to control foreign investments to protect its national interests. Since 2019, AI has been explicitly included among the critical technologies subject to this control, alongside cybersecurity, robotics, and biotechnology. Authorizations may include commitments to maintain the headquarters, sensitive activities, and the protection of strategic information in France.

The French state plays a key role as a client, funder, and regulator. The dual-use goods export control mechanism and the protection of the Nation's scientific potential (PPST) reinforce this resilience. However, attracting foreign investors remains crucial, as demonstrated by the "Choose France" initiative. France must find a balance between sovereignty and attractiveness.

Building National Champions

To build national champions, three levers are essential: targeted public procurement, significant capital, and the multiplication of industrial partnerships. The Lefebvre group notes the increasing number of players in the legal AI market, with a growing presence of Anglo-Saxon companies. At Bpifrance, Cassandre Gosselin selects French providers whenever possible to meet French and European regulatory requirements.

Bpifrance has allocated ten billion euros to the AI ecosystem as part of the France 2030 program. Bpifrance's participation remains minority, with no intention of taking control of the supported companies. The Caisse des Dépôts and the State Shareholding Agency (APE) are also involved, with significant investments to support digital innovation.

The European Scale, a Crucial Issue

At the European level, cooperation is essential. No member state can compete alone with American and Chinese investments. European regulations, such as the GDPR, the Cloud Act, and the AI Act, underscore the importance of a collective approach. Mistral AI saw its first shareholder become the Dutch ASML during its fundraising round last September, illustrating the need for cross-border collaborations.