French President Emmanuel Macron speaks during a meeting with members of the AI sector at the Elysee Palace in Paris, France, May 21, 2024.
Ioann Valat | AFP | Getty Images
French AI company H (formerly known as Holistic) made headlines when it raised $220 million in a seed round from investors including US tech giant Amazon and Eric Schmidt, the billionaire former CEO of Google.
What the heavily funded French AI companies have in common is that they count US tech giants on their shareholder lists.
Earlier this month, France saw a new wave of private investment, led by a 4 billion euro ($4.4 billion) investment from Microsoft, France's largest ever.
AI was everywhere at Viva Tech: Past the big, bright pink “VIVA” sign out front, there was an alleyway called “AI Avenue,” surrounded by US tech companies like Salesforce and AWS.
Generative AI was on display everywhere, and from companies you might not expect.
For example, French beauty giant L'Oreal showed off an AI-powered beauty assistant called “BeautyGenius” at a large booth near the center of the Porte de Versailles conference venue.
VivaTech's success is symbolic for France as it strives to become a major technology and AI hub to rival the United States and China.
“France is a leader in artificial intelligence in Europe,” French Finance Minister Bruno Le Maire told CNBC's Arjun Karpal at Viva Tech last week.
He made it clear that although France receives assistance from US tech giants, “we want our own artificial intelligence to be developed and developed in France.”
Regarding Microsoft's investment in France, Le Maire said: “We very much welcome Microsoft in our country. But the challenge for us is to have our own equipment, our own scientists, and we are working hard to achieve that.”
France boasts a strong AI research and development ecosystem, home to major facilities and leading universities, such as the Facebook AI research center at Meta and the Google AI research hub in Paris.
“France is one of the most vibrant centers of innovation in Europe,” Etienne Grasse, managing director for France at Capgemini Invent, the digital innovation division of Capgemini, told CNBC. “France is fostering a vibrant startup scene marked by great advances in AI,” Grasse added.
Imran Ghori, a partner at Blossom Capital, said France has a strong track record when it comes to research and academia but struggles to funnel quality talent into “great companies”.
Meta and the Google AI lab “have created a training ground for students and researchers to learn about the inner workings of a major technology company,” Gourley said.
“Many researchers and AI engineers are starting to start their own companies, and we are beginning to see results.”
French President Emmanuel Macron said in an interview with CNBC's Andrew Ross Sorkin last week that his country is “leading the tech industry in Europe,” but he also noted that Europe is “lagging behind” the U.S. and that the continent needs more “big companies.”
“A world in which the biggest companies only come from China and the United States is insanity,” Macron said at the Elysee Palace. The president also spoke of French AI companies Mistral and H.
Last week, Macron met at the Elysée Palace with former Google CEO Eric Schmidt, Meta's chief AI scientist Yann LeCun, and Google's senior vice president for technology and society, James Manica, to discuss how to make Paris a global AI hub.
Maurice Lévy, CEO of advertising and public relations giant Publicis Groupe, told CNBC's Karen Tsao that France has the potential to become one of the top five in AI development. Lévy said France is “determined” to close the gap with the US, China and Europe when it comes to AI.
In a television interview last week, Mr. Lévy said France “could be one of the top five countries in the world in AI,” after the U.S., China, Israel and the U.K. He cited H's huge funding round as an example of the current momentum surrounding AI in France.
Levy said roughly 40 percent of the tech demos at VivaTech were AI, which he said is “not just something that's becoming prevalent, but something that's already pretty widespread.”
At a fireside chat last week, Google's Manica said much of the innovation the company is bringing to the table comes from French engineers.
He said Google's recently announced lightweight open-source model, Gemma AI, was developed intensively at the US internet giant's Paris AI hub.
According to data from Dealroom, France accounted for around 20% of all European AI startup funding in 2023, higher than the 15% average European funding pumped into AI startups across the EU.
However, France is not a European AI leader, with UK companies raising more than double the amount of AI and GenAI investment than their French counterparts, according to Dealroom.
French President Emmanuel Macron said the challenge for Europe was to accelerate AI research and development while regulating it “at the right scale”.
Last week, the EU approved the AI Act, a landmark piece of legislation regulating artificial intelligence.
Some tech executives have warned that Europe's AI ambitions could be thwarted by too much regulation, and France has been one of the countries that has criticized EU AI law as being too tough on innovation.
Pascal Breher, chief innovation officer at Capgemini, said regulation is needed to stop AI becoming too powerful, but it's also important to ensure that new laws like the AI Act don't inadvertently “kill” innovation.
He said regulators should avoid implementing the “precautionary principle” – the idea that AI developers should, in principle, avoid actions that could cause harm.
“There's no way to stop AI. This is just the end of the beginning,” Breyer told CNBC. “It's not going to stop there.”
