Germany has shown huge improvement this year in a new ranking of the best hotspots for AI startups. Even so, Europe’s strongest economy still falls short of first place.
The best European country for artificial intelligence startups is Estoniaaccording to a new classification of the world map of startup ecosystems and the research center StartupBlink. The report, which ranks the 21 countries and 50 cities with the most AI startups, uses data on funding, team size, number of unicorns, and total investment, among others.
According to their findings, Estonia is the sixth best AI startup hub in the world and surpasses great European powers such as France and Germany. This position is six higher than the country occupies in the overall startup ecosystem ranking also published by Startup Blink earlier this year.
The decisive role of the Estonian government
The small Baltic country, with less than two million inhabitants, is known for the success of technology startups such as skype and boltand has the largest number of technological unicorns (startups valued at more than $1 billion or €950 million) per capita in Europe.
“Estonia’s notable performance in AI startup ecosystems is due to its focus on innovation and startup density, ranking second globally in AI startups per capita, with around 48 per million people” , said Ghers FismanHead of Research at StartupBlink to Euronews Business. “The success of the ecosystem is enhanced by Veriffan AI unicorn ranked in the top 20% by StartupBlink, based on investment, website traffic, and employee count,” he added.
Germany rises, but France falls behind
Compared to the previous ranking, France has fallen two places in the rankings as it has struggled to keep pace with the rapid growth of AI ecosystems in countries like Singapore, despite producing success stories like Mistral AI.
Meanwhile, Germany has risen three places from last year, securing seventh place and overtaking France.
“Germany’s rise to the seventh global position in the AI startup ecosystem is driven by its impressive 244% increase in AI funding during 2023, well above global trends,” he said. Fisman.
“With 463 AI startups – more than France, which it replaces in the ranking – the country has built a solid foundation for innovation. Success stories such as DeepLone of the top-ranked AI unicorns by StartupBlinkfurther highlight how Germany is leveraging its resources to establish itself as a leader in AI.”
OthersEuropean countries that have improved significantly are Sweden (17th) and Ireland (20th), which have risen five and four places respectively since 2023. Romania (11th) also ranks highly, surpassing European nations such as Norway, the Netherlands and Finland when it comes to nurturing AI startups.
Global ranking of AI centers
Globally, the US is the first country in AI, closely followed by Israel and the United Kingdom. According to the report, six of the top ten cities in AI are in the United States.San Francisco leads this rankingwith a score four times higher than the second, New York. Beijing is in third place.
London is the first European city in AIand fourth in the world rankings, with a 50.6% advantage over Paris, which secured eighth position. In AI, Bucharest It is well above its score in start-up ecosystems (26th). The city is also the fifth in Europe, surpassing cambridge (6th) and oxford (11th).
Major slowdown in AI funding in 2024
There is a notable slowdown in AI investmentscompared to last year, along with a decline in the creation of AI unicorns in 2023 and 2024, the StartupBlink report notes.
Funding in mid-2024 reached just over a quarter of the 2023 total. However, last year marked extraordinary highs and witnessed five massive financing rounds for a total of $18.55 billion (€17.59 billion) – including $10 billion (€9.5 billion) from OpenAI – which significantly boosted funding for the sector.
Need for 3% annual productivity growth
“In the first half of 2024 there was no round greater than 1,000 million dollars (950 million euros)which created a sense of stagnation,” says Fisman. “However, a significant boost at the end of the year“, such as OpenAI’s $6.6 billion (€6.26 billion) raise in October, illustrates how a single large funding event can reignite investor confidence and shape the trajectory of AI investments.”
The think tank Bruegelbased in Brussels, noted in a recent report: “Without a significant increase in productivity, The current trajectory of investment costs is unsustainable. We estimate that an annual productivity growth of 3% would be necessary in all advanced economies to maintain cost extrapolations from AI models until 2030.”
Add Comment