France is aiming to become a global AI superpower — but not without help from U.S. Big Tech
French President Emmanuel Macron speaks during a meeting with members of the AI sector at the Elysee Presidential Palace in Paris, France, on May 21, 2024.
Yoan Valat | Afp | Getty Images
PARIS — France is touting itself as the next artificial intelligence superpower.
The Viva Technology conference in Paris last week was buzzing with talk about how far France has come as a leader in AI.
A great deal of chatter surrounded the French AI firm H, previously named Holistic, which raised $220 million in a seed funding round from investors including U.S. tech giant Amazon and Google’s billionaire ex-CEO Eric Schmidt.
A common theme for French AI firms receiving large sums of money is that they’re adding U.S. tech heavyweights to their shareholder lists.
Earlier this month, France received a flood of new private investments, led by a commitment from Microsoft of 4 billion euros ($4.4 billion), its largest ever into France.
AI everywhere at Viva Tech
At Viva Tech, AI was everywhere. Past the large, bright pink “VIVA” sign toward the front, there was an entire alley called “AI Avenue,” which was surrounded by U.S. tech firms such as Salesforce and AWS.
Generative AI was on display everywhere — even from companies you wouldn’t 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.
The success of Viva Tech has become symbolically important for France as part of its bid to become a leading tech and AI hub that can rival the likes of the U.S. 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 clear that, while France has a helping hand from U.S. tech giants, “we want to have our own artificial intelligence being created and being developed in France.”
Referring to Microsoft’s investment in France, Le Maire said, “Microsoft is much welcome in our country. But the challenge for us is to have our own devices, our own scientists … and we are working very hard for that.”
France boasts a strong AI research and development ecosystem, home to key facilities like 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, the France managing director of Capgemini Invent, the digital innovation arm of Capgemini, told CNBC. “The nation nurtures a thriving startup scene, marked by significant strides in AI,” Grass added.
Imran Ghory, partner at Blossom Capital, said that while France has a great track record when it comes to research and academia, it has struggled to funnel quality talent into “great companies.”
AI labs from Meta and Google have “created a training ground for students and researchers to learn what leading tech companies look and work like from the inside,” Ghory said.
“We’re now seeing the fruits of this as many researchers and AI engineers begin spinning out their own companies.”
Vying for tech leadership
French President Emmanuel Macron told CNBC’s Andrew Ross Sorkin in an interview last week that his country is “leading the tech industry in Europe.” However, he noted Europe is “lagging behind” the U.S. and that the continent needs more “big players.”
“It’s insane to have a world where the big giants just come from China and the U.S,” Macron told said at the Elysee Palace. He praised Mistral, the French AI firm backed by U.S. tech giant Microsoft, and H.
Last week, Macron met 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, at the Elysee to discuss ways to make Paris a global AI hub.
Maurice Levy, CEO of advertising and public relations giant Publicis Groupe, told CNBC’s Karen Tso he thinks France has the potential to become a top five country for AI development. Levy said France is “determined” to narrow the gap between the U.S. and China and Europe when it comes to AI.
France “can be part of the five biggest countries on AI in the world,” after the U.S., China, Israel, and the U.K., Levy said in a TV interview last week. He referred to H’s mammoth funding round as an example of the momentum surrounding French AI right now.
Levy said roughly 40% of the tech demos at Viva Tech were AI. AI is “something which is … not only taking off, but has already taken off quite massively,” he said.
In a fireside discussion last week, Google’s Manyika said a lot of the innovation the firm has been bringing to the table is sourced from engineers in France.
He said that Google’s recently introduced Gemma AI, a lightweight, open-source model, was developed heavily at the U.S. internet giant’s Paris AI hub.
According to data from Dealroom, France claimed a roughly 20% share of overall European AI startup funding in 2023, higher than the 15% average of European funding that goes into AI startups across the bloc.
France isn’t the European AI leader, though, according to Dealroom, with U.K. firms raising more than double the amount of both AI and GenAI investment than France.
Innovation versus regulation
France’s Macron said the challenge for Europe is accelerating AI research and development while also regulating at “appropriate scale.”
Last week, the EU approved the AI Act, a landmark law regulating artificial intelligence.
Some tech executives warned Europe could hamper its AI ambitions with regulation that is too restrictive. France has been among the countries to have criticized the EU AI Act for being too restrictive when it comes to innovation.
Pascal Brier, Capgemini’s chief innovation officer, said while regulation is needed to ensure AI isn’t left to become too powerful, it’s important to ensure new laws like the AI Act don’t accidentally “kill” innovation.
He said regulators should avoid implementing the “principle of precaution” — the idea that AI makers should avoid doing things that can do harm, as a rule.
“There’s no way you can stop AI — it’s only the end of the beginning,” Brier told CNBC. “It’s not going to stop there.”
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Read the full Bloomberg story here.
— CNBC’s Samantha Subin contributed to this report.
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.
WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard
CNBC’s Jennifer Elias contributed to this report.
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