France and Britain are battling it out for Europe’s A.I. crown
U.K. Prime Minister Rishi Sunak and French President Emmanuel Macron.
Kin Cheung | Pool | Getty Images
LONDON — Two countries are jockeying for position as Europe’s capital for artificial intelligence.
Both French President Emmanuel Macron and British Prime Minister Rishi Sunak have made bold statements about AI in recent weeks, as each tries to claim a stake in the highly hyped market.
“I think we are number one [in AI] in continental Europe, and we have to accelerate,” Macron told CNBC’s Karen Tso at France’s annual tech conference Viva Tech on June 18, while Sunak pitched the U.K. as the “geographical home of global AI safety regulation” at the London Tech Week conference on June 12.
AI is seen as revolutionary and therefore of strategic importance to governments around the world.
Hype around the technology has been partly sparked by the viral nature of Microsoft-backed OpenAI’s ChatGPT. It has also been the source of tech tensions between the U.S. and China as countries around the world try to harness the potential of the most critical technologies.
So, who is leading the race to take Europe’s AI crown?
Money matters
At VivaTech in Paris, Macron announced 500 million euros ($562 million) in new funding to create new AI “champions.” This comes on top of previous commitments from the government, including a promise to pump 1.5 billion euros into artificial intelligence before 2022, in an attempt to catch up with the U.S. and Chinese markets.
“We will invest like crazy on training and research,” Macron told CNBC, adding that France is well-positioned in AI due to its access to talent and startups forming around the technology.
In March, the U.K. government pledged £1 billion ($1.3 billion) to supercomputing and AI research, as it looks to become a “science and technology superpower.”
As part of the strategy, the government said it wanted to spend around £900 million on building an “exascale” computer capable of building its own “BritGPT,” which would rival OpenAI’s generative AI chatbot.
However, some officials have criticized the funding pledge, saying it’s not enough to help the U.K. compete with titans like the U.S. and China.
“It sounds great but it’s nowhere near where we need to be,” Sajid Javid, a former government minister in ex-PM Boris Johnson’s cabinet, said in a fireside discussion at London Tech Week.
Policing A.I. abuses
One big difference between the U.K. and France is how each country is opting to regulate artificial intelligence, and the laws already in place that affect the quick-moving technology.
The European Union has its AI Act, which is set to be the first comprehensive set of laws focusing on artificial intelligence in the West. The legislation was approved by lawmakers in the European Parliament in June.
It assesses different applications of AI based on risk — for example, real-time biometric identification and social scoring systems are considered as posing “unacceptable risk,” and are therefore banned under the regulation.
France will be under direct jurisdiction of the AI Act, and it would be “unsurprising” if the relevant French regulator, either the CNIL or a new, AI-specific regulator, took an “aggressive approach” to its enforcement, according to Minesh Tanna, global AI lead at international law firm Simmons & Simmons.
In the U.K., rather than issue AI-specific laws, the government launched a white paper advising various industry regulators on how they should enforce existing rules on their respective sectors. The white paper takes a principles-based approach to regulating AI.
The government has touted the framework as a “flexible” approach to regulation, which Tanna described as more “pro-innovation” than the French method.
“The UK’s approach is driven, in a post-Brexit world, by a desire to encourage AI investment,” he added, which gives the U.K. more “freedom and flexibility to pitch regulation at the appropriate level to encourage investment,” he said in an email to CNBC.
In contrast the EU’s AI Act could make France “less attractive” for investment in artificial intelligence given that it lays down “a burdensome regulatory regime” for AI, Tanna said.
Who will win?
“France definitely has a chance to be the leader in Europe, but it faces stiff competition from Germany and the U.K.,” Anton Dahbura, co-director of the Johns Hopkins Institute for Assured Autonomy, told CNBC via email.
Alexandre Lebrun, CEO of Nabla, an AI “copilot” for doctors, said the U.K. and France are “probably even” when it comes to attractiveness for starting an AI company.
“There’s a good talent pool, strongholds like Google and Facebook AI research centers, and a reasonable local market,” he told CNBC, but he warned that the EU AI Act would make it “impossible” for startups to build AI in the EU.
“If at the same time the U.K. adopts a smarter law, it will definitely win against EU and France,” Lebrun added.
At the same time, London has been the source of a lot of doom and gloom from some corners of the industry, who’ve criticized the country for being an unattractive place for tech entrepreneurs.
Keir Starmer, the leader of the opposition Labour party, told attendees at London Tech Week that a series of political crises in the country has dented investor sentiment on tech generally.
“Many investors say to me we are not investing in the U.K. right now because we don’t see the conditions of certainty politically that we need in order to invest,” Starmer said.
Claire Trachet, CFO of French tech startup YesWeHack, said the U.K. and France both have potential to challenge the dominance of U.S. AI giants — but it’s just as much about collaboration across Europe as it is competition between different hubs.
“It would require a concerted and collective effort of European tech superpowers,” she said. “To truly make a meaningful impact, they must leverage their collective resources, foster collaboration, and invest in nurturing a robust ecosystem.”
“Combining strengths — particularly with Germany’s involvement — could allow them to create a compelling alternative in the next 10-15 years that disrupts the AI landscape, but again, this would require a heavily strategic vision and collaborative approach,” Trachet added.
The Nasdaq MarketSite in New York, June 9, 2023.
Michael Nagle | Bloomberg | Getty Images
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
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