AI in France: Between Potential and Major Structural Obstacles

The Rise of AI Startups in France

France has invested early in artificial intelligence, notably with the Villani report, and has seen notable successes such as Mistral AI. Currently, it has around 1,200 AI startups. This figure, although lower than the 1,950 American startups, represents rapid growth since 2021, when only about sixty startups were present. Germany, on the other hand, has around 650 AI startups. However, despite this acceleration, the gap with the United States and China seems to be widening.

Structural Barriers to Competitiveness

Several obstacles hinder France and Europe’s competitiveness in the field of AI. The Draghi report emphasizes the need for a unified capital market at the European level, which could unlock up to $10 trillion. Currently, the absence of such a market limits the development of startups. Additionally, the possibility for the European Commission to have larger intervention budgets is crucial. Currently, the European Union's budget represents only 1% of GDP, compared to 23% for the U.S. federal government.

The unification of financial markets is essential, as it would allow for the securitization of non-fungible assets, thereby facilitating access to capital. The European Commission could also benefit from more substantial intervention budgets, reflecting the importance placed on Europe.

The 28th European Regime: A Potential Solution

The 28th European regime, proposed by the European Commission, aims to simplify procedures for businesses within the EU. This legal framework would allow for the creation of companies under uniform rules, thus facilitating fundraising and access to the single market while reducing costs and capital requirements. This regime would also enable companies to freely choose their country of incorporation while fully accessing the single market.

Specifically, the 28th regime, under the name EU Inc., would offer a unique set of European corporate law rules, applied uniformly across all member states. This includes the ability to create and manage a business entirely digitally, to launch an activity quickly and at low cost, and to facilitate the transfer of shares and cessation of activity.

The AI Act: Necessary Regulation or Hindrance to Innovation?

The regulation of AI is deemed essential by many experts, although it may be perceived as a hindrance to innovation. The European approach contrasts with that of the United States, which seeks to surpass China at all costs, raising questions about trust in national capabilities. This regulation has benefits in terms of standardization, but it is sometimes seen as an obstacle by those who believe that regulation slows down innovation.

It is crucial to avoid a black-and-white approach. Regulation is necessary to establish standards, but it should not stifle innovation. The American approach, which focuses on beating China at all costs, is considered absurd by some, as it reflects a nation that no longer trusts its own capabilities.

Future Sectors for France

The link between AI and quantum technology is identified as a promising area for France, particularly thanks to research from Inria. However, funding for research remains a challenge, with R&D spending representing only 2.2% of GDP, below the OECD average of 2.7%. For France to establish itself in this sector, it is crucial to reassess funding and investment strategies in research.

In general, France must seriously consider the strategy it wishes to adopt. It is inconsistent to declare the importance of AI and quantum technology while reducing the CNRS budget year after year.

A Message for CMOs and Marketing Departments

Marketing leaders are encouraged to fundamentally rethink their organizational and production models. What we are experiencing now is not just a simple incremental change, but a true rupture. AI offers opportunities to transform the customer experience, but this requires a proactive stance towards technological changes. The coming world can be seen as a threat or an opportunity, and the difference lies in how companies choose to adapt.

It is essential to start with the objective, such as promoting a brand or product, and to ask what AI can bring to completely rethink the experience. Marketing professions are particularly exposed to the transformations induced by AI, and it is crucial to organize accordingly.