How Europe is racing to resolve its AI sovereignty woes

While not yet as illustrious as its North American counterparts OpenAI, Anthropic, or Cohere, Europe’s own cohort of generative AI startups is beginning to crystallise. Just yesterday, news broke that Germany’s Aleph Alpha had raised €460mn, in one of the largest funding rounds ever for a European AI company. 

The European tech community received news of the investment with some enthusiasm. While much focus has been on how the EU will regulate the tech (and how the UK will or will not), there hasn’t been a whole heap of attention on how the bloc will support artificial intelligence innovation and reduce the risk of being left behind in yet another technological leap. 

During a press conference about the investment, Germany’s Vice Chancellor and Minister for Economic Affairs Robert Habeck stressed the importance of supporting domestic AI enterprises. 

“The thought of having our own sovereignty in the AI sector is extremely important,” Habeck said. “If Europe has the best regulation but no European companies, we haven’t won much.”

Transparency, traceability, and sovereignty

At the same press conference, Jonas Andrulis, Aleph Alpha’s founder and CEO, stated that the investors participating in the latest round (including the likes of SAP, Bosch Ventures, and owners of budget supermarket giant Lidl) were all partners the company had worked with before. Notably, all but a small contribution from Hewlett Packard came from European investors or grants. 

“What was so important for me, right from the beginning with our research, is transparency, traceability, and sovereignty,” Andrulis added, playing on ethical considerations that could potentially set a European LLM apart, as well as geopolitical objectives. 

Aleph Alpha is building a large language model (LLM) similar to OpenAI’s GPT-4, but focusing on serving corporations and governments, rather than individual consumers. But there are other things separating the two companies — OpenAI has 1,200 employees, whereas 61 people work at Aleph Alpha. Furthermore, the former has secured over €11bn in funding.

However, with the construction of the €2bn Innovation Park Artificial Intelligence (Ipai) in Aleph Alpha’s hometown of Heilbronn in southwest Germany, the startup may end up receiving the boost it needs to level the playing field. Construction of Ipai is slated to be complete in 2027, by when it will be able to accommodate 5,000 people. The project is supported by the Dieter Schwarz Foundation, which also participated in Aleph Alpha’s latest funding round. 

Europe’s lack of AI contender geopolitical issue

Founded in 2019, Aleph Alpha is not a newcomer to the game. In 2021, before ChatGPT-induced investment hysteria, the company raised €23mn, in a round led by Lakestar Advisors. Such an amount has, of course, since been overshadowed by numbers in the billions of dollars on the other side of the Atlantic. However, Aleph Alpha did raise another €100mn, backed by Nvidia among others, in June this year.

And the German startup isn’t the only European player raking in the dough. Only a few weeks after the company’s founding in May this year, France’s Mistral AI raised €133mn in the reportedly largest-ever seed round for a European startup.

Presenting a challenge to Aleph Alpha’s claim to the European GenAI throne, the company is also developing an LLM for enterprises. Although, its very first model, Mistral 7B, is totally free to use. In its pitches to investors, Mistral, founded by former Google and Meta employees, reportedly warned it was a “major geopolitical issue” that Europe did not have its own serious contender in generative AI. 

Meanwhile, Germany’s is not the only government looking to shore up domestic generative AI capabilities. The Netherlands recently commenced the development of its very own homegrown LLM to provide what it said would be a “transparent, fair, and verifiable” GenAI alternative.