France is aiming to become a global AI superpower — but not without help from U.S. Big Tech

PARIS — France is positioning itself as the next artificial intelligence superpower.

The Viva Technology conference in Paris last week was bustling with talk about France’s progress as an AI pioneer.

There was a lot of buzz surrounding the French AI business H, formerly known as Holistic, which raised $220 million in a seed fundraising round from investors including US internet behemoth Amazon and Google’s wealthy ex-CEO Eric Schmidt.

French AI firms that get huge sums of money frequently add U.S. tech heavyweights to their shareholder lists.

Earlier this month, France got a rush of fresh private investments, led by Microsoft’s commitment of 4 billion euros ($4.4 billion), the largest it has ever made in France.

AI is everywhere at Viva Tech.
Artificial intelligence was everywhere at Viva Tech. Beyond the enormous, bright pink “VIVA” sign toward the front, there was an entire alley called “AI Avenue,” which was bordered by US IT companies like Salesforce and AWS.

Generative AI was ubiquitous, including from unexpected companies.

L’Oreal, for example, demonstrated an AI-powered beauty assistant named “BeautyGenius” at a big booth near the middle of the Porte de Versailles conference venue.

The success of Viva innovation has become significant for France in its quest to become a premier innovation and AI hub capable of competing with the United States and China.

“France is the leader on artificial intelligence in Europe,” Bruno Le Maire, France’s finance minister, told CNBC’s Arjun Kharpal at Viva Tech last week.

He made it clear that, while France receives assistance from U.S. tech companies, “we want to have our own artificial intelligence being created and developed in France.”

Le Maire commented on Microsoft’s investment in France, saying, “Microsoft is quite welcome in our country. But the difficulty for us is to have our own gadgets and scientists, and we are working very hard to achieve that.”

France has a significant AI research and development environment, with key facilities such as the Facebook AI Research Center from Meta and Google’s AI research hub in Paris, as well as leading universities.

“France stands as one of Europe’s most vibrant innovation hubs,” Etienne Grass, France managing director of Capgemini Invent, Capgemini’s digital innovation unit, told CNBC. “The nation nurtures a thriving startup scene, marked by significant strides in AI,” said Grass.

Imran Ghory, a partner at Blossom Capital, stated that, while France has a strong track record in research and academics, it has failed to attract top personnel to “great companies.”

Meta and Google’s AI laboratories “created a training ground for students and researchers to learn what leading tech companies look and work like from the inside,” Ghory added.

“We’re now seeing the fruits of this as many researchers and AI engineers begin spinning out their own companies.”

Vying for technological leadership
In an interview with CNBC’s Andrew Ross Sorkin last week, French President Emmanuel Macron stated that his country is “leading the technology industry in Europe.” However, he stated that Europe is “lagging behind” the United States and that the area requires more “big players.”

“It’s insane to have a world where the big giants are only from China and the United States,” Macron said at the Elysee Palace. He lauded Mistral, a French artificial intelligence business supported by Microsoft, as well as H.

Last week, Macron met in the Elysee with Eric Schmidt, former CEO of Google, Yann LeCun, chief AI scientist of Meta, and James Manyika, Google’s senior vice president of tech and society, among others, to discuss how to make Paris a worldwide AI powerhouse.

Maurice Levy, CEO of Publicis Groupe, told CNBC’s Karen Tso that France has the potential to be one of the top five countries in AI development. Levy stated that France is “determined” to close the artificial intelligence gap between the United States, China, and Europe.

In a recent TV interview, Levy stated that France “can be part of the five biggest countries on AI in the world,” following the United States, China, Israel, and the United Kingdom. He cited H’s massive funding round as an indication of the current enthusiasm in French AI.

According to Levy, AI accounted for almost 40% of the tech demos at Viva Tech. Artificial intelligence is “something which is … not only taking off, but has already taken off quite massively,” he stated.

During a fireside discussion last week, Google’s Manyika stated that most of the innovation the company has been bringing to the table comes from engineers in France.

He stated that Google’s recently launched Gemma AI, a lightweight, open-source model, was substantially developed at the company’s Paris AI unit.

According to Dealroom data, France grabbed almost 20% of total European AI startup financing in 2023, which is more than the 15% average of European funding for AI startups across the EU.

According to Dealroom, France is not the European AI leader, with UK corporations investing more than twice as much in AI and GenAI as France.

Innovation versus Regulation
France’s Macron stated that the problem for Europe is to accelerate AI research and development while simultaneously regulating at a “appropriate scale.”

Last Thursday, the European Union enacted the AI Act, a significant law governing artificial intelligence.

Some tech leaders have cautioned that Europe’s AI goals could be hampered by too restrictive regulations. France is among the countries that have criticized the EU AI Act for being excessively restrictive in terms of innovation.

Pascal Brier, Capgemini’s chief innovation officer, stated that while regulation is necessary to prevent AI from becoming too strong, it is also critical to ensure that new regulations, such as the AI Act, do not mistakenly “kill” innovation.

He stated that authorities should resist enforcing the “principle of precaution” – the premise that AI developers should generally avoid doing things that potentially cause harm.

“There’s no way you can stop AI — it’s only the end of the beginning,” Brier stated to CNBC. “It’s not going to stop there.”