Denmark Copy link
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The headline: Denmark is a world-leader in digitised public services, thanks in large part to the work of the Government’s specialist Agency for Digital Government and pro-innovation policy initiatives. The country’s startup ecosystem is underpinned by strong Government-industry-investor partnerships and high levels of AI adoption.
The context: Denmark ranks 12th in Europe for AI VC funding in 2024. Although direct public AI funding has been stripped back from the initial €9.2 million set out in the National Strategy to €5 million, Denmark has an established state-backed, innovation-focused investment culture through the Export and Investment Fund and Innovation Fund.
The strategy: The Government has sought to make Denmark an attractive location for innovative businesses by creating a startup-friendly operating environment. This includes facilitating high levels of AI adoption in public services and businesses through the National Uptake Fund for New Technologies, and establishing a specific visa scheme and network of business advice centres for founders who want to start their business in Denmark.
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Denmark has a strong early-stage funding pipeline and a good ecosystem for founders. This thriving pro-innovation environment is driven by the Government itself, which has established state-sponsored programmes such as Startup Denmark and Invest in Denmark to encourage foreign companies to start or expand their businesses in the country.
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Denmark is attracting significant private investment into AI innovation, capitalising on the Nordics’ reputation for excellent cloud and compute commercialisation viability for small businesses. In March 2024, Denmark announced a new partnership with Nvidia to launch a "National Centre for AI Innovation", including the development of an AI supercomputer, with the aim of accelerating research and innovation in existing areas of research expertise such as life sciences and the green transition. The supercomputing resource is due to be in operation by the end of 2024.
Estonia Copy link
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The headline: Estonia boasts a highly advanced "digital state" supported by the Ministry of Economic Affairs and Communications, which creates a tech friendly ecosystem. While Estonia has a particular emphasis on AI adoption and use in public services, they are also pushing to attract foreign investment and provide early support for homegrown founders.
The context: Home to the most startups per million people in Europe, Estonia punches above its weight in terms of funding, ranking ninth for investments into generative AI startups and securing over $70 million of venture capital investment in 2022. There is also strong public support for AI, with €30 million already invested as part of the Government’s AI strategy and more funding to come.
The strategy: Estonia has a revolutionary digital state and is interested in accelerating the adoption of AI and tech among their population through funding and digitisation initiatives. Estonia also regularly reviews and produces new AI strategies every few years - the most recent is Estonia’s National Artificial Intelligence Strategy or Kratt Strategy for 2022–2023. In February 2024, the Ministry of Economic Affairs and Communications also published a White Paper on Data and Artificial Intelligence, which sets out targets for the widespread adoption of AI in public services and across the private sector by 2030 along with an investment of €85 million to finance the strategy.
What this means for founders Copy link
Estonia is seen as a very founder-friendly market, particularly because it is one of the quickest markets to test out new ideas, through the AccelerateEstonia programme. The existing digital infrastructure and familiarity with technological integration into public services also offers a number of influential networking groups for founders, such as the Estonian Founders Society and e-Estonia, as well as Government funding for startups through Startup Estonia and Estonian Business and Innovation Agency.
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Estonia has ambitious public AI investment targets. Copy link
Every couple of years, the Government’s AI taskforce produces a report and sets an AI budget: the 2024-2026 investment recommendation has been set at €85 million.
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Finland Copy link
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The headline: Finland has a particularly strong AI infrastructure and research environment, as the home of one of the highest performing EU supercomputers (LUMI) and the Finnish Centre for Artificial Intelligence (FCAI), a research collaboration body set up to tackle societal issues using AI. However, commercialising its AI research capabilities remains a work in progress due to private and public funding constraints.
The context: Finland suffered from a drop in foreign VC investment in 2023. Late-stage funding was particularly badly hit, although the domestic seed and early-stage startup investment landscape remains strong. Public AI investment and Government attention has also been diverted away from AI in recent years, as demonstrated by the closure of the Government’s flagship €200 million AI Business programme in 2021 and the discontinuation of the AuroraAI digital public services programme in 2022.
The strategy: Finland was the first EU country to set out an AI strategy in 2017. The latest iteration of the strategy, Artificial Intelligence 4.0, builds on the original strategy but focuses on realising the economic potential of AI in Finland by accelerating the digitisation of businesses: particularly SMEs.
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Finland has the infrastructure and research capabilities to help develop and launch innovative ideas but struggles to get later stage funding through the door. Business Finland and Technology Industries of Finland are the two main touchpoints for founders in the country - the latter has committed €10 million to support AI project development among its members - while the city of Helsinki runs a "founders to Finland" programme for international scaleups.
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Quantum computing is emerging as an area of Finnish expertise. Copy link
Finland’s access to the LUMI supercomputer puts it at a competitive advantage in breakthrough quantum computing research. €13 million has already been invested in the Finnish Quantum Flagship programme, an eight-year project launched in January 2024 with the aim of expanding Finland’s quantum ecosystem and making Finland a hub for quantum research and business ventures.
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France Copy link
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The headline: France is presenting itself as a startup-friendly country for AI: particularly for open-source. It is also the home of European "digital sovereignty" - i.e. preventing Europe’s digital industry from becoming over-reliant on other regions (particularly the US) by building the infrastructure and capabilities needed to support the entire AI value chain.
The context: Home to the largest tech hub in the European Union for VC investment, France has a strong public and private funding landscape. The total Government investment in AI-related projects is upwards of €4 billion, while in May 2024, Microsoft and Amazon announced a €4 billion and €1.2 billion investment respectively into French cloud and AI infrastructure. Additionally, the Government has announced its intention to make France a global open-source AI hub, building on the success of Mistral, having announced a €40 million fund for French open-source AI projects in 2023. This aim has been compounded by private investment of over €300 million into Kyutai, a new French research lab that aims to build open-source Artificial General Intelligence.
The strategy: France’s policy goal is to establish the funding, talent and adoption pipelines for SMEs that will make it the best place in Europe to found an AI-enabled business. The National AI Strategy and France 2030 programme - a €54 million state-backed innovation investment initiative - have been developed with the digital sovereignty goal in mind: priority development areas are scaling SMEs, developing AI skills, and supporting innovative research.
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France has a thriving AI ecosystem and a long-term funding commitment for innovative projects, managed through a combination of Inria (a science and technology research funding body) and BPIfrance (its €2 billion sovereign national wealth fund), making it one of the most attractive places to start or scale innovative businesses in Europe. The country also has an attractive stock option system, which has been instrumental in helping founders attract and hire the right talent.
France's pro-innovation approach has cultivated 'champion startups' in generative AI with global reach. Decades of investment in AI education are paying off as talent returns from Silicon Valley and French AI startups emerge as leaders. The government's support for these emerging champions is driving the ecosystem forward. Copy link
Lyline Lim Copy link
Head of Impact and Sustainability, Photoroom
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AI optimism and innovation form the core of France’s AI policy. Copy link
Under President Emmanuel Macron’s leadership, France has sought to position itself as a leader in AI innovation. During the political negotiations over the EU AI Act, France repeatedly resisted attempts to tighten the rulebook on the grounds that it could harm French and EU generative AI competitiveness. Similarly, the upcoming "AI Action Summit" in Paris on 10-11 February 2025 will move away from the AI safety and risk priorities of previous Summits, focusing also on AI innovation and adoption.
Digital sovereignty and open-source AI will continue to be political priorities. Copy link
France is the leader of the EU’s drive to create European-first AI systems and digital infrastructure. The Government’s political focus on making France an open-source AI hub and investing in AI R&D should be seen as an extension of its digital sovereignty aims, with the aim of diversifying AI capabilities away from US-based big tech firms and creating French "national AI champions" in their place. We expect this approach to AI to continue regardless of the changing political environment in France.
Copyright and data reforms could be on their way. Copy link
The intersection between generative AI, IP and data protection laws is emerging as an area of political focus for France. In September 2023, the French Government proposed amending the French Intellectual Property Code to ensure that copyrighted work is adequately protected when integrated into AI systems, although the evolving political dynamics in France will determine whether this gets taken forward. The French Government is also pushing to reopen and amend the EU Copyright Directive along similar lines, and the impact of AI on the creative industries is set to be a key theme in the AI Action Summit.
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Germany Copy link
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The headline: Home to a handful of notable AI companies, Germany has a very strong research culture and industrial expertise. However, the country is seeing lower AI adoption rates than comparably sized markets as it attempts to bridge the gap between research and entrepreneurship.
The context: Although it is the largest national economy in Europe, Germany lags behind both France and the UK in terms of availability of venture capital for startup investments, importing more AI products and services than it exports. Despite this, the country’s strong economy does make it an attractive investment location, with Microsoft announcing €3.2 billion for developing AI infrastructure in February 2024. Public AI investment also remains high, with the Government aiming to inject €5 billion into AI between 2018-2025.
The strategy: Germany’s wide-ranging National AI Strategy has undergone various iterations since first being launched in 2018. The current focus is on addressing the country’s long-standing difficulty in mobilising capital to support innovative startups as they scale, and incentivising the transfer of research to real-world applications.
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Although Germany is playing catch-up on AI innovation, its strong economic, research and industrial landscape weighs heavily in its favour. The Government-backed €10 billion Future Fund which will run until 2030 has already created tangible improvements in the investment picture and is likely to be expanded to focus on new investors (such as pension funds).
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European partnerships and foreign direct investment will play an important part in Germany’s AI policy. Copy link
Since Germany’s homegrown AI innovation sector has yet to realise its economic potential, the country is likely to look to FDI and AI innovation partnerships with other European countries to facilitate its digital transition. One example is the German, French and Polish governments making use of their so-called "Weimar Triangle" framework to initiate alignment on AI strategy and push for "European AI" synchronised policies and investments.
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Italy Copy link
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The headline: Italy made AI headlines when its data protection authority temporarily banned OpenAI’s ChatGPT in 2023. Since then, the Government is seeking to take a more balanced "middle way" approach that combines promoting AI innovation with upholding ethical standards in society. Nevertheless, Italy is continuing to break the mould by being the first European country to introduce further AI legislation on top of the EU’s AI Act.
The context: Italy’s startup culture has historically lagged behind that of other major European countries, but the tide is beginning to turn. The country is attracting increasing levels of VC investment and rapidly becoming a hub for digital B2B startups, with the first foundational LLM trained exclusively in Italian now available for businesses to use. The Government is supporting the investment landscape with a €1 billion state-backed investment fund specifically for AI projects. Additionally, the Government has pledged to invest €10 billion in 2024 to develop its chips industry, including the planned construction of two new semiconductor manufacturing plants.
The strategy: Italy is looking to create an "Italian way" on AI leadership that prioritises human-centric and ethical AI development. It has reinforced its National AI Strategy and the EU AI Act with a domestic AI Bill that tightens regulation beyond the scope of the AI Act in areas of particular societal or economic risk, such as health, employment and intellectual property.
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If, as expected, the domestic AI Bill becomes law, founders establishing a presence in Italy will need to ensure their products and services comply with both the EU AI Act and the Italian law, particularly in areas like copyright and data protection where Italy’s legislation is likely to go further than the AI Act.
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Italy is using its G7 Presidency to establish its AI leadership credentials. Copy link
The Government is aiming to stamp the "Italian way" model of ethical AI development onto the global governance picture beyond Italy’s 2024 G7 Presidency, in order to heighten the country’s reputation as an AI leader and attract more investment.
The creative industries lobby in Italy will continue to influence AI & copyright policy. Copy link
Italy’s publisher trade bodies are very active in the country’s policy landscape, with a particular focus on lobbying for tougher rules on the use of copyrighted works in generative AI training and deployment. We are likely to see strong interventions from these groups on this issue as Italy’s AI Bill progresses and the review period for the EU’s Copyright Directive approaches.
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Q4 2024: The Italian Senate is expected to approve the text of the AI Bill. It will then progress to the Chamber.
2025: The AI Bill could become law as early as 2025.
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The Netherlands Copy link
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The headline: In perhaps a world-first, the Dutch Government fell in 2021 as a result of a technology event: a scandal that saw 1.4 million people unfairly categorised as child benefit fraudsters by a biased algorithm. Since then, the Dutch Government has championed transparency as a key guiding principle for AI governance in the public sector, whilst investing in the necessary skills and infrastructure to keep the Dutch AI ecosystem open and thriving.
The context: Within Europe, the Netherlands ranks 6th for VC investment. The Dutch AI ecosystem is benefitting from near total connectivity with 98% fast broadband coverage and 99% 4G coverage. It has a strong talent pipeline thanks to world-class R&D universities and the world’s largest research network for AI (CLAIRE), as well as a large data centre market in Amsterdam.
The strategy: Traditionally, the Dutch have taken what they call a ‘triple helix approach’ to nurturing their AI ecosystem: establishing clear links between the public, private and research sectors, including through initiatives like the Netherlands AI Coalition (NAIC). Through its Government-wide vision on Generative Al, and the establishment of public algorithm registers, the Dutch Government is keen to create an open and consultative approach to its policies and laws for AI.
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Since Brexit, the Netherlands have been vying to become the digital gateway to Europe. The Dutch Government has been funnelling innovation funding for startups and scaleups through initiatives like Innovation Credits, the Seed Capital Scheme, the Dutch Venture Initiative, as well as public-private investment initiatives like Invest-NL Deep Tech Fund to bridge the gap between research and commercial viability.
At the same time, the Dutch Government’s efforts to make algorithmic transparency mandatory for AI technologies deployed in the public sector, means that founders deploying AI in the Netherlands will likely face demands from their clients to show that their systems meet the same requirements. Furthermore, there are signs that these obligations will be extended to private companies too.
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As of July 2024, the Netherlands has a new, right-wing coalition Government under the leadership of technocrat Dick Schoof. Copy link
Zsolt Szabó has been appointed as State Secretary for Digitalisation and Kingdom Relations. He has previously noted that centralised AI will be a priority.
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Spain Copy link
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The headline: The Spanish Government has been a first mover on implementing the EU’s AI Act, as the first member state to create a competent authority for the Act’s enforcement, and launching the first regulatory sandbox.
The context: Responding to criticism that VCs in Spain had traditionally been too risk-averse to invest in tech startups, recent investment figures have shown a more positive investment trend in the country. The Spanish Government has focused intervention on public-private investment in the skills and infrastructure required to drive uptake of AI in both sectors, with a clear focus on AI for citizens’ benefit.
The strategy: Spain’s €1.5 billion National AI strategy in Spanish only is focused on reducing social inequality and promoting AI adoption in the private and public sector. The strategy capitalises on Spain’s supercomputing capabilities, aims to incentivise sustainable storage capabilities, and announces the creation of Spanish language foundation models (in partnership with IBM) to make up for the lack of linguistic diversity in current models.
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Spain's ambition to attract businesses that want to develop responsible and sustainable AI means there are plenty of initiatives for founders to get involved in. ENISA, the innovation organisation charged with implementing the National AI Strategy and Kit Consulting, the Government’s main support programme to help startups adopt AI are two such initiatives, as well as the €2bn taxpayer funded Next Tech Fund to help high-impact and high-tech startups scale.
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The Spanish Government is set to continue its work on implementing the EU AI Act and its National AI Strategy in collaboration with industry. Copy link
An International Advisory Council on Artificial Intelligence has been set up with key leading industry figures, and the Government plans to continue consulting with this body throughout the implementation of the National AI Strategy in 2024-2025. The Spanish AI Supervision Agency (AESIA) is currently being recruited and set up to start its mandate as Spain’s AI regulator.
Spain is also set to bolster AI’s underpinning infrastructure, with the MareNostrum 5 supercomputer due to become operational in 2025, in addition to launching the Spanish language foundation model ‘ALIA’ in the same year. Recognising the cyber security risks attached to AI development and deployment, a Cybersecurity Law will be introduced to create a clear framework and improve the protection of information systems, networks and data.
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Sweden Copy link
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The headline: Home to Europe’s tech success story Spotify, Sweden has a strong record in strategic AI development, particularly within large export companies, and boasts a high percentage of startups per capita primarily clustered in Stockholm.
The context: Having launched a first AI strategy in 2018, the Swedish Government has now moved to establish an AI Commission (AIC) Swedish only to conduct a comprehensive analysis of prevailing ‘conditions’ in Sweden, i.e. whether existing educational and legislative structures are sufficient to meet the future needs for AI use and development. The most recent AI-specific strategy to come out of Sweden was launched by industry and civil society (AI Sweden) to guide policymakers’ thinking.
The strategy: Recent Government intervention has focused on tightening foreign direct investment rules into Swedish companies, including in ‘emerging technologies and other strategic technologies’, and ‘dual use products’, such as AI, quantum computers and other technology that may have future or current significance for essential public services.
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Sweden’s innovation agency, Vinnova, has been spearheading work on testbeds, including in the field of AI, and on specific funding options for AI startups. Wider support and funding is also available through AI Sweden’s AI startup programme, and the Wallenberg AI, Autonomous Systems and Software Program which regularly calls for pilot projects in the fields of AI basic research.
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As Sweden moves towards implementing the EU AI Act, it will be interesting to see what other actions the Swedish Government will take to complement the EU’s regulatory framework. Sweden’s innovation agency has called for a more strategic approach to AI development from the Government, which, to date, has not received a formal response.
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Switzerland Copy link
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The headline: Switzerland is fast emerging as a European leader in AI, alongside the UK and France. It has a business environment already suited to innovation, with particular strengths in the life sciences, pharmaceutical and financial services industries, and is also home to a strong research base through the AI expertise of universities such as ETH in Zurich and EPFL in Lausanne.
The context: Switzerland has ranked first in the World Intellectual Property Office’s Global Innovation Index for 13 years in a row, due to its strong research and business environment, pro-innovation policy landscape and close research-industry collaboration (through initiatives such as Switzerland Innovation), enabling the efficient transfer of technology from development to integration. Private AI investment is also growing: several leading tech companies have AI-related R&D bases in Switzerland - including IBM, Google, Novartis and Apple - and the country now ranks fourth in Europe for VC funding behind the UK, France and Germany.
The strategy: Following the adoption of the EU AI Act, the Swiss Government has tasked the Department of the Environment, Transport, Energy and Communications (DETEC) with drawing up potential approaches to regulating AI while protecting Switzerland’s thriving AI research and innovation landscape.
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The Swiss research and operating environment is well-positioned to support founders of innovative businesses to start and scale their businesses in the country. Of particular note is Innosuisse, the Swiss Government’s innovation agency, which provides financial support for startups (both national and international) and has a budget of upwards of €250 million per year.
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The forthcoming AI regulation strategy is more likely to resemble the UK’s approach than the EU’s. Copy link
Despite Switzerland’s proximity to the EU, the Swiss Government has made it clear that it is not seeking to mirror the AI Act approach by introducing horizontal legislation on AI. Instead, the Government is likely to protect its burgeoning AI sector by following the UK’s pro-innovation regulation approach and integrate AI rules into existing laws.
Timelines Copy link
Q4 2024: DETEC is due to report back with recommendations on future Swiss AI regulation.
2025: Switzerland aims to formalise and implement a new AI regulation strategy.