- 21 hours ago
"This session opens with a 10-minute launch of the Global Startup Ecosystem Report 2026, where Stephan Kuester will present key insights from this year's report.
While much of the AI conversation focuses on investment trends and frontier models, a different story is unfolding beneath the surface. Across the world, new ecosystems are producing high-potential AI companies through unique combinations of talent, industry depth, and commercialization pathways. This session explores where real AI innovation is emerging beyond the dominant hubs, bringing a ground-level perspective from founders and ecosystem leaders on how AI businesses are being built and scaled."
While much of the AI conversation focuses on investment trends and frontier models, a different story is unfolding beneath the surface. Across the world, new ecosystems are producing high-potential AI companies through unique combinations of talent, industry depth, and commercialization pathways. This session explores where real AI innovation is emerging beyond the dominant hubs, bringing a ground-level perspective from founders and ecosystem leaders on how AI businesses are being built and scaled."
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TechTranscript
00:07Bonjour VivaTech. Bonjour Paris. Thank you so much for joining us this morning for the launch of our annual global
00:13startup ecosystem report, which will give you a very comprehensive picture of what's happening in the world of startups from
00:19a global scale. I feel very privileged to be here for the second time, having had the opportunity to present
00:25last year. What a bumper year it has been.
00:30A story of recovery after the big funding winter we've been talking about, suffering as entrepreneurs, as investors over the
00:37last few years. A story of unprecedented dynamism, and we'll unpack that for you in a moment. And also a
00:44story of a huge shift in value to North America.
00:48Let's get into that in a little bit more detail. But I want to take just a few seconds with
00:54a huge shout out to the 140 or so plus ecosystem agencies, all the contributors, our partners all across the
01:01world, such as LaFrenchTech and many others, who contribute to the report, to the insight that we do for entrepreneurs.
01:08Hundreds of incubators, accelerators, more than 100,000 entrepreneurs themselves all around the world, who have given us their voice
01:16and contributed. So a big thank you, merci, to everybody who has been contributing to it.
01:21Without further ado, rankings first. That's always what everybody wants to see from us. No big surprises in the top
01:27group. Silicon Valley, New York, London, the usual suspects when it comes to the top group of startup ecosystems.
01:32Below, a lot of flurry, a lot of change in our top ranking. These are the top 20 in the
01:37world. If you want to summarize it a little bit, U.S. ecosystems, even the ones outside of the top
01:43group, outside Silicon Valley and New York, up Asia, particularly China, down, summarizes it quite well.
01:50Few surprises in there, but that's the big view, and we'll unpack why this is happening, of course. Emerging rankings,
01:58those aspiring startup ecosystems that we rank differently all across the world.
02:02But what's happening here in the top group, Mumbai first, Istanbul doing really well, and it is a bit of
02:07a European story, European continent story, at least, including with the U.K. and Manchester, Liverpool showing a staggering performance.
02:15Really good news from a European perspective when we look at our emerging rankings on the up. Good dynamism. We're
02:21glad to see that.
02:22Key findings of our report overall, major driver is AI. No surprise here, but we will go into the detail,
02:31and I promise you that's going to be really interesting.
02:33Ecosystem value, huge shift to North America. Again, we'll unpack what is happening here. Funding, Series A, up. Really, really
02:42good what we are seeing. Late-stage funding, okay.
02:44A lot of dynamism and seed, and I want to unpack all of that for you in the next nine,
02:50ten minutes or so.
02:53First story, AI native. What is that? What are we talking about? We did a piece of research coding all
02:58startups across the world that we could possibly find into different categories of AI.
03:03Trying to separate them from the rest of tech. So, what is native AI for us? A business model that,
03:09at its very kernel in the tech stack, could not live without having AI applied to it.
03:15These are the ones that we grabbed. We wanted to show what is happening in this part of our global
03:19startup ecosystem community.
03:21Staggering 507% plus in ecosystem value growth in native AI. That's, if my math is correct, about 12x of
03:32what the rest of the tech startup ecosystem is producing, bar in the middle.
03:36And if you put that in a long-term perspective a little bit into the context of an economy, Europe
03:41grew over the last five years as an economy by 30% GDP growth.
03:45It's AI native 500% plus. It is staggering the amount of value that is being created in that segment.
03:53And if we predict this a little bit further, we are in 2026. By 2030, we believe, that's our prediction
03:59model, that AI native will be the biggest contributor to the tech, the biggest part of the tech economy.
04:06And how big is that? The tech economy this year is about 10 trillion US dollars in ecosystem value.
04:11AI native is going to catch up with the rest of tech no later than 2030. We are very, very
04:17sure of that.
04:18It's a huge dynamism that's happening.
04:20I spoke about value shift back to North America. When we started out at Genome, we tried to bring insights
04:26so that many startup ecosystems outside of North America, outside the top 10 group, could participate, and entrepreneurs would have
04:33a chance.
04:33We always believe we are in a good way. Really, the concentration came down over the last decade since we
04:40are doing this research.
04:41This year, it has shifted very considerably back to North America. And what you see here, purple bars, that's ecosystem
04:49value this year, and the little diamonds in the middle, that's the ecosystem value last year.
04:53And just look what happened in North America. They added 2 trillion or so in ecosystem value within a reporting
05:00year's period. It's incredible.
05:02Whilst the others, Asia, Europe, Latin America, Oceania, and so forth, yeah, we see some growth, but it's marginal in
05:08comparison.
05:09What makes that picture, for me, even more striking, staggering, sometimes a little bit scary, is of that overall ecosystem
05:17value growth of North America.
05:19Three cities, Silicon Valley, Los Angeles, and New York, are contributing 66% in ecosystem growth globally in that space.
05:30It's incredible.
05:32We ought to talk about funding. Last year, I was standing here talking about the funding winter post the inflationary
05:38bubble, cheap money chasing investment post the pandemic period.
05:41We had a depression when it came to access to funding in Seed and Series A and late stage. That
05:48picture has changed. Last year was stable, but look at the last quarter, Q1, 2026.
05:54It is up very, very significantly. And our predictions show we are very, very confident that this year will be
06:00a staggering year for Series A investment growth really happening on a global scale.
06:07But again, with a focus on North America, the North America region, light blue on the top, and the dark
06:14blue that's us here in Europe, also doing extremely well when it comes to the growth trend in funding.
06:20So hopefully, we are past the funding winter. All the indicators are hugely positive.
06:26Seed, my particular darling, because Seed funding in the end tells us what's happening in the next generation of startups,
06:31right?
06:31Am I, as a founder, getting the money that I need to form and start growing my business?
06:412025, looking okay. But when it's the second bar from the right, when you look at it, Seed funding is
06:47notoriously hard to capture.
06:49Angel investments, Seed rounds that are not disclosed. So we are only seeing in our data about 50%. There's a
06:54huge data lag.
06:56We apply our prediction models, and we believe, and we are very, very sure with this prediction, that we will
07:01see a staggering 2026 for Seed funding.
07:04So really good news for those that are coming into funding their businesses for the first time.
07:10We believe it's 2x of what we saw last year in Seed funding. Seed funding is back, confirms the story
07:15of funding winter.
07:17Over, we are back on track.
07:19And last, just to round it out, the other perspective from early to late, late-stage funding series A plus
07:25B, C, continues to grow steadily.
07:28Look at Q1, 2026.
07:30Even if you take out, we are talking north of 200x billion in late-stage funding this year, even if
07:37you take out Antropic and OpenAI, you still see very, very significant growth.
07:41So overall, story amongst the data, funding winter, hopefully over, and we are really looking positively into the next year.
07:51Again, hugely driven by North America and partially in Europe, but North America being the big growth story.
07:59Exits. Exit values are increasing as well.
08:03Important story for us as entrepreneurs.
08:05Are we able to get to an exit, to a sizable exit?
08:09Can we recycle our capital?
08:10For us as venture investors, can we recycle the capital we've invested?
08:15The last three quarters or so looking extremely good.
08:19Second from the right is a bit influenced by a large Chinese exit.
08:23But overall, the curve is absolutely positive, so we're really, really bullish about it.
08:28North America leading an exit deal size.
08:30No surprise here for European visitors, for our politicians in the room, we ought to do something about exit, the
08:39ability to exit, to get to stock market, stock market valuations.
08:43In Europe, what you see here is the top quartile of exits in their respective regions.
08:49And the little blue thing in the middle of these bars is the median value.
08:54The median in the U.S. is roughly equivalent to the very best quartile of exit values that we see
09:00in Europe.
09:01And that tells us a long story of what's happening to capital and being able to exit, have sizable exits.
09:06In Europe, we ought to do something here.
09:09Hugely positive, IPOs are back.
09:13And, of course, hugely important because IPOs gives us, as entrepreneurs, the ability to recycle capital experience, go for the
09:22next venture, become an angel investor and mentor, and, of course, for the funds also to recycle their capital.
09:28It's particularly the IPOs that's the dark, darker blue shade here, extremely strong this year and trending further up.
09:35So, IPOs back, public IPOs, the important message.
09:40And to unpack a little bit, apart from all the financial data, what is happening in the world of different
09:46sectors of tech?
09:48Talked a lot about AI already.
09:51What we show you here is two things.
09:54On the Y-axis, the young money, series A, funding count.
09:59These are young investments, right, going into your young companies.
10:02So, you want to be up on the chart as a sector.
10:04That's where the dynamism in young startups and investment is.
10:08Horizontal axis, exit count.
10:10Mature companies going for exits.
10:12So, where do we really want to be as a sector on the upper right-hand side?
10:15And no surprises here.
10:17AI native out of the charts, right, when you see where we are in terms of dynamism.
10:22We got the exits, but we also got the new money going into new ventures.
10:26That is the story of AI native this year.
10:28The second one is new.
10:30We never had it before, but for obvious reasons, we started coding and researching on defense tech.
10:36In a very narrow definition, this is really exclusively defense tech.
10:40And you can see it's the second one here in this upper right-hand quadrant.
10:44So, extreme dynamism in defense tech.
10:46Maybe not a surprise, but we can see how the tech industry or global startup ecosystem is taking the challenge
10:53and contributing to defense as well.
10:55So, these are the clear highlight stories.
10:59The rest, all these other sectors, AMR, Advanced Manufacturing Robotics, FinTech, CleanTech, very, very flat, right?
11:08Just look, they are all on the horizontal axis, so it's not that dynamism in it.
11:12It's really a story about very, very few sectors.
11:15Almost a little bit, to me, astonishing, worrying that we don't see more happening in the rest of tech.
11:22Certainly surprised us a little bit.
11:23That picture looked very, very different only two years ago.
11:30Let's unpack AI, if it's so important.
11:32What we did again, we looked at AI as a total globally.
11:36We tried to differentiate it a little bit.
11:38Who is really bringing the growth?
11:40Is it the model builders?
11:41That's MO on the left-hand side.
11:43Is it other derivatives of model builders, M1, M2?
11:47Is it the business application, the apps that are using AI to solve a business problem?
11:53To provide a service, that's B, for business?
11:56Or is it the infrastructure, the cloud providers?
11:59I think the picture speaks for itself.
12:01So the big models, minus 52% in growth.
12:06I think the battle of the big models has been done.
12:10I think investors are realizing that.
12:12Unless we come up with something completely new, maybe local compute edge, I think we want to see much dynamism
12:21here again.
12:22The story is playing out entirely in the applied AI and the apps businesses.
12:27And if you go back in history, it's maybe the transition from, I don't know, package software to SaaS.
12:34Or from, we got Netscape and all of a sudden somebody built a little bookshop.
12:38I think he's speaking later today.
12:40That is happening now in the space of the AI apps.
12:44And it's really important, particularly for those that are ecosystem builders amongst us, what can you do to participate in
12:50that trend?
12:51Agentic AI, can you bring in corporates, enterprises, solve their problems with startups helping to solve their problems with agentic
12:58AI, with applications AI powered?
13:01That's where the growth is.
13:02That's where we expect the value creation over the next few years.
13:05As enormous as it is, as I showed you just very early on, is going to happen.
13:10So, really big takeaway.
13:12And again, the shift, where's the new money going in, where's seed money going in at the moment?
13:17These are all the countries mapped out for AI on the right-hand side, dark blue last year, lighter blue
13:22left.
13:23In France, in the United States, in the UK, in Singapore, everywhere across the world, we have this fundamental shift
13:28towards much faster funding rounds and much bigger checks.
13:33What we are seeing is interesting.
13:35Series A venture funding all of a sudden is going into seed.
13:38That's why you see these big rounds and seed funding in AI, in AI native, coming at a velocity, a
13:46funding velocity, the speed to the round that we've never witnessed before.
13:49So, investors, rounds are going towards seed, they're going earlier, they're going much faster, and the ticket sizes are much
13:55bigger.
13:56And that's a very consistent picture.
13:58That's it.
13:59As a brief summary of what's happening in the world, thank you for giving us the opportunity to show you
14:05these trends.
14:05We will be picking up the conversation, and particularly the one what can we do as ecosystem builders, as politicians,
14:12as policy makers, to support the growth of AI and make sure it is happening all across the world and
14:17we participate all across the world.
14:19We'll be picking this up, this conversation at the Global Entrepreneurship Congress happening a little bit later in the year
14:25in Doha.
14:25I'm very glad to see Jonathan, our dear friend from Global Entrepreneurship Network.
14:31We will be picking this up, this discussion.
14:33We invite you to join us there for policy discussion to see what can we jointly do to further the
14:39story of entrepreneurship and success in native AI.
14:43Without further ado, it's my great pleasure to call to the stage our own distinguished Samantha Evans,
14:49who's got the most distinguished panel of speakers for you to unpack what we saw in data just a few
14:55minutes ago.
14:56Sam, great pleasure to have you.
15:02Am I on? I'm on. Okay, great.
15:05Good morning, everyone. My name's Sam Evans, and I am the Managing Director of Startup Genome in the GCC.
15:14And I'm here today with a great panel.
15:17For those of you who don't know who we are, a Startup Genome, we are a world-leaning innovation ecosystem
15:23advisory firm.
15:24So what that means is that we work with different governments around the world to make sure that entrepreneurs can
15:29scale no matter where they are
15:30and make sure that the policies, the investors, the corporates, the buyers are all working together to make sure that
15:37entrepreneurship is successful
15:39and you don't have to just live in the valley.
15:42So today I have a great panel of guests who can cover all these different things that we look at.
15:49So I'd love to welcome Yarek, CEO and founder of D-Pel.
15:54We have Elodie from Hub 71 in Abu Dhabi.
15:59Please take a seat. Sit wherever you would like, Yarek.
16:02And we have Suzanne from Sovereign AI based out of London.
16:07And Naomi from Jethro in Tokyo.
16:14Thank you, everyone.
16:15So the session today is about where is the next wave of AI innovation really emerging?
16:22We've seen in the data that Stefan's just showed that a lot of AI activity is being concentrated in China
16:29and in Silicon Valley, which is not surprising.
16:32But we don't want to sit back and wait to see what happens in the valley when we're living in
16:36the rest of the world.
16:37So I'd really love to dig deep into that.
16:40And we have a very conversational panel today.
16:44Everyone has some great insights.
16:46And we really are looking at where globally competitive AI companies are emerging from.
16:51And what conditions can we have in different ecosystems around the world to make sure that every entrepreneur can really
16:58strive and be successful?
17:01I'm going to begin with you, Yarek.
17:02I always begin with our founders on the stage first, because they're the most interesting people normally, because I'm usually
17:08on with just policymakers.
17:09Usually.
17:10Today we've got a great panel.
17:11You just want to put me on the spot.
17:14Yarek, congratulations on just winning the Entrepreneur of the Year in Germany.
17:18So well done for that.
17:19It's an honor to have you here.
17:21You built DeepL from 2017, right?
17:26From Cologne, if I'm correct.
17:28Now, 200 billion investment or valuation, 200,000 customers.
17:36Can you talk a bit more about how, what were the conditions that allowed you to grow in that way
17:42when people didn't know what AI was 10 years ago?
17:45Yeah, I think our edge actually was that we have been applying AI and using AI at a point in
17:51time where this was technology that was not known to this world.
17:55That was something fresh.
17:56That was something new.
17:57We didn't advertise it back then even so much.
17:59Like, you wouldn't find AI on the website of DeepL because people were more, like, scared of that.
18:05What is it?
18:05But we have been already leveraging that and using that for our products, and I think that has allowed our
18:11products just to be much better than anything else on the market and us being able to just really have
18:16this viral product-led growth that we have enjoyed.
18:23So that's that.
18:25But then on the other hand, like, obviously, we came in at a point in time that was really SaaS
18:30-dominated.
18:31So it was this kind of merge of the SaaS model and the business models of back then and the
18:40AI technology that has helped us, but also something that we had to navigate.
18:44And then also the next wave when AI came in and SaaS stopped being the interesting thing that you would
18:52be talking in this keynote before, we had to also, like, really shift gears as a company or change direction
18:59in some ways.
19:01And for those who don't know what DeepL is, one, you're a fantastic partner for us, so we will be
19:07using, or we have been using DeepL as an organization, and our report will be in lots of different languages
19:13thanks to Jarek and his team.
19:15Can you explain a bit more about how you've grown to that many customers and how the conditions within your
19:23environment, how did you get there?
19:24Yeah, so basically DeepL has started off as a translation platform that was mostly used by prosumers out there in
19:33the world.
19:34A little bit of consumer usage, a lot of consumer usage in Japan, which obviously has a kind of slightly
19:40bigger language barrier to go over.
19:45And we have been helping a lot of people to communicate, and this kind of grassroots movement, they took it
19:54into their companies, and they started figuring out, how can I use that in our business for making things better?
20:01For making things easier, for going into new markets, or just making communication between different offices more simple.
20:11Like, let's take a company that is manufacturing in India, but all of the headquarters are in Europe, and how
20:18do we figure out communication internally?
20:20And that has been moving more and more into this direction from kind of a consumer, prosumer product loved by
20:28millions and millions of users into a very kind of serious tool that you'd be using to translate the most
20:39significant and most critical and vulnerable texts or documents in your company.
20:46Like, we have airlines that are translating their airplane maintenance records with DeepL automatically, so the requirements on AI are
20:55incredibly high, and it kind of blends a little bit into this distinction that you've been talking about in your
21:03report, where there's the model builders and there's the business applications.
21:07Actually, what makes you be super successful is being both the model builder and also owning the application and having
21:15this whole vertical stack.
21:16And that was always our thesis.
21:19That's super interesting.
21:20I'm going to move on to you, Elodie.
21:22I'm also based in Abu Dhabi in Hub 71.
21:25I've been there for the last two years.
21:27Previously lived and worked in Singapore, Silicon Valley for 10 years, London, of course.
21:31And one of the things that Yarek was just talking about is this customer activation.
21:38That's something that we see across the world is where the ecosystems are really going to be able to grow.
21:45It's not just funding.
21:47It's not grants.
21:48It's really about customers.
21:50So I know that in Abu Dhabi, the team and the ecosystem are really working on how do they attract,
21:57retain, grow startups for the GCC in the wider region from Abu Dhabi.
22:03Can you talk a bit more about how the adoption of technology with these corporations, how do we get there
22:09with them?
22:10Because that's the challenge.
22:11It's not the technology.
22:12It's the other side.
22:13It's the buyers, right?
22:15Yes, definitely.
22:15So giving a little bit of background, you know, in context about Hub 71, we are the global tech hub
22:21from Abu Dhabi, the capital of the UAE.
22:23We were born around six years ago as a startup ecosystem.
22:27And our objective has been to be able to have a GDP impact and diversify the economy away from oil
22:33and gas by being able to support the local tech founders in the region,
22:39but also attracting, you know, founders to build that new economy with us.
22:44If we look at our journey, you know, we are now home for more than 350 startups.
22:50And from the beginning, it was very critical for us, you know, not to focus only on fundraising because, of
22:58course, you know,
22:58that's the metric that we are using in our industry to speak and rank about, like, success.
23:05But I think if you go back to basic, which are, like, why a company is built for, you know,
23:09a company is built to be profitable.
23:12So that's why for us from the beginning, we created a value creation team before even looking at other programs
23:18or any specific verticals, you know, we wanted to support.
23:21But we built a value creation team to be able to help our community to access market.
23:28That was the first one.
23:29But also, of course, funding, but also being able to work with regulators and government.
23:36And the last step was to help them also international expansion, you know, by building cross-border programs.
23:43When we built, you know, the team looking at access to market and bringing the partnership with the corporate, what
23:49was very important for us,
23:51because as, you know, this is the topic of today's panel, we were an emerging ecosystem.
23:56So most of the big corporates or national champion we had in the UE at that time were not used
24:04to work with startups.
24:05And we know, especially by supporting, you know, like, early stage founders, that it's a race.
24:12It's a race against time, you know, you need to access market as fast as possible.
24:17So that's why we spent a lot of time working with corporates into that journey, making sure that they understand
24:24that POC need to be paid, pilot need to be paid.
24:27It's not for free.
24:28And making sure that also their own processes were ready.
24:32You know, when you want to work with an early stage startup, you can't ask them for their, like, five
24:36years audited account.
24:37That doesn't work, you know.
24:39So making sure that the procurement processes, budget were allocated, and that was a hard work that has been done
24:45by the team since we were created, and now it's paying back.
24:50If we speak about figures, our community of startup have been able to raise more than 3 billion USD in
24:56funding,
24:57speaking only about, like, generally pre-A, post-A companies.
25:02And we've been able to facilitate, you know, and to help them access to more than 1.7 billion USD
25:08commercial contract.
25:11So that was really, you know, encored as the heart of what we were building.
25:16And I think now most of the people are coming, you know, to build their venture and build their technology
25:23in the UAE, especially in AI,
25:25where we've been ranked in your new release report the second most active ecosystem in MENA.
25:31So they are coming with us to be able to access, you know, these different programs that our local corporates
25:41are putting in place.
25:43If we go back to AI, we have very interesting figures, you know, in our country.
25:50It's now representing around 13% of the GDP.
25:54So that's a journey that we started a long time ago.
25:57And when you look at the workforce, 80% of the employees in the UAE are already using AI tools.
26:05So that is maybe also something which is very important in our part of the world, is that we are
26:10really embracing innovation.
26:12Our regulators are also embracing innovation.
26:16So that helps us, you know, move maybe at a faster trend than other regions in the world.
26:23And I think some of the things that we look at is talent.
26:26There's a war on talent everywhere, always.
26:28It's always been the case.
26:29And we're kind of looking at what is the entrepreneurial talent now.
26:34It's people who are industry experts who can use AI that's already there.
26:38So I think that there's a real shift in the world of how can emerging markets really grow faster, but
26:46not using the traditional ways that we thought, attracting engineers, attracting, you know, academics, that kind of thing.
26:53Who's been working in these jobs for 20 years?
26:55Who knows there's a better way of doing what they do?
26:59London, UK, is not an emerging market necessarily, Suzanne.
27:03I'd love to talk more about and understand more about sovereign AI, because I think the model that you're building
27:09there is really interesting.
27:11And I think that that's something that we'd really love to hear about and what challenges it is that you're
27:15trying to solve in the UK.
27:18Sure.
27:19Well, I started in the job three weeks ago, so I'm still getting up to speed myself.
27:24The fund itself is now a couple of months old.
27:27It's based in the UK.
27:28Our sole investor is the UK Treasury.
27:31It's a £500 million fund targeted exclusively on investing in UK-based, UK-nexus companies in the AI space, both
27:42the sort of AI native companies and AI companies sort of reinventing traditional industries.
27:48Our first three investments have been in that AI native space, which pretty much reflects the chart that we've seen
27:55earlier.
27:55We're also really excited about the potential for AI to deliver improvements in, I mean, broadly areas that government delivers
28:07public services, whether that's healthcare, education.
28:10Those categories where the wave one of technology really has not yet delivered meaningful productivity improvements, where the cost of
28:18goods and services for the population are getting more expensive with each passing year rather than less expensive.
28:25And I think we're really hopeful that some of the improvements in AI will deliver, like, not only better services,
28:34but also at a significantly lower cost.
28:37I would challenge your last point that the founders are largely domain experts.
28:43I think that's simply, like, not what we're seeing at the moment.
28:47If you look at, you know, the founder of Europe's leading legal AI business, I think Max from Legora is
28:56probably in his mid-20s, had no previous experience in legal, and he has simply out-executed all of the
29:04domain experts in his space.
29:06Ditto, the leading European player in financial services, sort of AI tools.
29:11So, what we're looking for in founders is actually quite different now than it was five, ten years ago.
29:21So, it's really looking at people who can see there's a problem and looking for the solutions for that rather
29:26than, you know, just people who maybe are sat in a corporate job and thinking, I want to be an
29:32entrepreneur.
29:32How do I jump across there?
29:34I think it's probably a collective of those things, but I completely agree.
29:38You know, working with some of the, you know, people coming out of these universities have got incredible brains.
29:45Jarek, what do you think about Suzanne's comment there?
29:48Where are you seeing in your community of founders, of leading founders around AI?
29:53Where are they coming from, and what's driving them to become founders?
29:57I think relentless execution is what you're looking for right now, and this is what we're seeing the most.
30:03I think maybe, like, even technical, like, competency is slightly less viewed nowadays.
30:10Like, I'm coming from a research perspective.
30:13I would be probably a founder of more like an AI research model lab nowadays, too, rather than one of
30:19those business execution functions that are just built on existing models.
30:23And I think those are really valued right now in the market.
30:26This is where a lot of the action happens, and I think that's also, like, a lesson for us, who
30:34founded a couple of years ago to make this shift towards execution, execution, execution, this being the most important part.
30:42Because it's a land grab nowadays, and the pace is just astonishing at this point in time.
30:49And then, something Suzanne said is that what they look at in founders now is very different to what it
30:55was five years ago.
30:56Naomi, can you talk a bit more about, in Tokyo, what you see in the changes are in the founders
31:02that you're starting to work with within Jetro?
31:06Yeah, I'm working for a Japanese government agency to support.
31:10So, now we have, like, 2,000 startups in our portfolio, which are ready for going global.
31:16And now we have more and more, how can I say, the day one global, from day one thinking global
31:27startups.
31:29And going more to Silicon Valley from day one.
31:32And also, we have more and more AI-native startups, and most of 100% of startups are using AI
31:41in our portfolio.
31:42And on this discussion, I think Japan has a kind of advantage in several domains, like entertainment industries, and also
31:54manufacturing places.
31:55So, in that point, we have an advantage.
32:00We have domain experts, and also we have domain data, which can be used for AI.
32:07And so, this kind of sector, vertical AI, agentic AI, we see more and more startups from Japan.
32:17Gotcha.
32:18And Suzanne, when we talk about sovereign AI, what was the problem in the, sorry, what was the challenge, not
32:25a problem, in the UK that you were plugging that gap?
32:29Because this investment is pretty good.
32:33You know, from my understanding, I'm not there anymore.
32:35But what exactly was it that, just so that we can think for other leaders from other ecosystems, what are
32:42you trying to plug there?
32:43That the government intervention is going to support the growth?
32:46Sure.
32:47I think, like lots of other European countries, the policymakers in the UK felt there were significant gaps in UK
32:58capability in the sovereign tech stack.
33:02And that doesn't mean that we want to be entirely self-reliant.
33:06That's not possible.
33:07Even the US isn't totally self-sufficient.
33:11They rely on, you know, ASML, TSMC for their NVIDIA chips.
33:18So, the goal is not to sort of cut off the US or global players.
33:26Like, that will always be an important part of the mix.
33:30But I think we felt that we wanted to be, as a country, an AI maker, not simply a taker
33:39and a buyer of, you know, international tools, largely US tools, as the report showed.
33:44And there are certain categories where we felt that the UK had an edge and a potential to create globally
33:53significant players.
33:54You know, take, like, hardware.
33:58There's one emerging UK chip business, Fractile.
34:03And we can support them, for example, with an advanced market commitment to say, when you meet these technical milestones,
34:10government will be a purchaser of your chips.
34:13And there are other categories.
34:15I mean, let's stay in the chip space.
34:16There's a company called Olix.
34:18They do photonics chips.
34:19You know, in France, you guys are very lucky with your energy prices.
34:23In the UK, people pay significantly more for energy, and therefore, we have to be thoughtful about what we will
34:32need as a country versus others with cheaper energy.
34:36And one of those categories is, you know, photonics chips deliver similar performance for significantly lower energy costs, and therefore,
34:44it makes sense for the UK to be a home for, you know, leading companies in that space.
34:49So, it's not completely about just concentrating, but it's working from the UK, but then also having that global connectedness,
34:58which I think is super key for any kind of growth, isn't it?
35:01And Elodie, in Abu Dhabi and the wider UAE, they've invested a lot in AI for a long time now.
35:09Where do you see emerging markets who are growing significantly, have funding, you know, trying to grow in this space?
35:18Where are their advantages compared to, you know, the traditional ecosystems that are, you know, the New York, San Francisco,
35:25maybe not San Francisco, you know, the Londons of the world?
35:28Where do you see emerging markets being able to kind of take advantage of this time and place that we
35:33are with AI?
35:35I think, you know, for this, you need to, as you were saying, the UAE has been investing in AI
35:40since a long time.
35:41But I think that what a lot of people doesn't know is that the country is starting to look at
35:47that particular vertical industry 20 years ago.
35:50So, Mubadala, one of our Sonnenweil funds, invested and took a major stake in AMD in 2007, two years after
35:58they bought some spin-out lab from AMD to create global fundrais.
36:03Global fundrais now being one of the main, you know, players in manufacturing of chips, being 100% owned by
36:09the UAE.
36:09So, this journey is not new for us, and we've always been resilient with that industry, even in time where
36:15it was, like, a little bit difficult, you know.
36:19We were the first country to have a ministry dedicated to AI, and this was in 2017.
36:25So, again, you know, we were already embedded that vision that AI will disrupt, will be the next technology that
36:33will disrupt our economies, and we really wanted to embrace it.
36:37You know, the fact that we are a young nation, we don't need to deal with legacy.
36:42So, that's why everything we are doing, we are really embracing the future, you know, and being able to build
36:52for this new type of economies.
36:55And, I think, especially, you know, in Abu Dhabi, with the recent creation, you know, a couple of years ago
37:03of MGX, the race of G42, which is our national champion in AI.
37:09The fact that we've been able to support, you know, also access to computing capability with the Stargate program.
37:15A lot of people are speaking about the Stargate program in the U.S., but we are also building our
37:20own capabilities in Abu Dhabi.
37:22So, we are offering, you know, to take startups that will come to our ecosystem.
37:26On one side, you know, the compute capability that will be needed.
37:30On the other side, you know, like, government, local corporates who are embracing that new wave and are looking for
37:37new solutions to be able to make it more profitable.
37:42And, on the other side, also building the ecosystem of talent, we would need to be able to support that
37:48new wave.
37:49You know, we've also been the first nation to create a university entirely dedicated to AI, which is MBZ UAI.
37:58And, I think that by the combination of these different elements, you know, that gives you all the tools you
38:04will need to be able to grow that economy.
38:06And, as we're looking at what we should be doing differently, as founders, policy makers, investors, ecosystem leaders,
38:17Yarek, as a founder, what do you think that, you know, if you were giving advice to new founders coming
38:25up through the ranks, new entrepreneurs,
38:27what's the best advice you're giving out to people who are coming to you at the moment around this next
38:33wave?
38:35I think I would first say pick the right place to be.
38:39And, I think there was a lot of conversation around kind of what is the emerging areas.
38:45I think out of the experience of having founded out of a city that is not on this list anywhere,
38:51really, and I'm very proud for that.
38:54And, I'm really, really, really lucky to having founded in Cologne, I think.
38:59But, now speed matters a lot.
39:01Talent matters a lot.
39:02And, you want to be in a place that is really somewhere on the top of this list.
39:06And, you pick and choose which one it is going to be.
39:09I think the times of where you could kind of start from a random place in this world are gone.
39:15And, also, I really want to foster those centers to be as strong as possible.
39:22We are distributed enough in Europe.
39:25Let's strengthen those places where we already are.
39:30That is maybe number one.
39:32And, number two is work really hard.
39:36I think this is a time for working really hard.
39:39And, we should, as a society, we should appreciate that.
39:42We should be proud of those people that want to go on this journey.
39:46But, as a founder, you also have to do this inner dialogue with yourself and sign that contract.
39:52Hey, this is going to be a super fun and super interesting journey.
39:55But, it's going to be a hard one.
39:57Yeah, it's going to be hard for a few years.
39:59One of the things that we measure in the GSER is global connectedness.
40:04And, we find that founders who are connected to someone in Silicon Valley grow their businesses four times faster than
40:12anyone else.
40:13And, that doesn't mean that you have to live there.
40:15I have personal experience.
40:16I was there for a decade and it completely changed my life and my career because of the density of
40:20conversation and the connections that you make.
40:23And, we see, you know, founders from other markets who are there regularly, not necessarily living in San Francisco or
40:29Silicon Valley, but actually having those relationships, who can open up things, you know, having those conversations.
40:36I think it's very similar in London as well.
40:38It's such a multicultural city.
40:40People are in the Valley a lot.
40:42I was at the UK government previously there.
40:45And, we had a lot of initiatives to make sure that our founders were connected to founders in the Valley
40:51for exactly that reason.
40:52It's that connectedness, that global connectedness really kind of helps with that.
40:57And, Japan is so far away from the Valley in a sense.
41:01And, you're saying that lots of the founders are now global first.
41:06What kind of advice would you be giving to your policy makers to support the founders on that journey?
41:14So, actually, we support them to set up a privacy call in the U.S. and also getting visa in
41:21the U.S.
41:22Because, without funding from the U.S., you cannot be a unicorn.
41:26And, our target is to make unicorns more.
41:29And, for example, the Sakana AI, which we can name it like several AI startups in Japan,
41:37which is the biggest in terms of variation, I think 2.5 billion USD as a private company, which is
41:48the biggest.
41:48And, they got funding from Kosovo Ventures and NEA and Lux Capital, which is a top-tier U.S. BCs.
41:57So, that's why we are trying to make Japanese startups to connect with those ecosystems in the U.S. or
42:07global ecosystems.
42:09And, Jetro have outposts in all of these key markets to support those Japanese companies
42:14and companies trying to expand into Japan, right, as well?
42:17Yeah, we have 76 offices, but to support startups, Silicon Valley or San Francisco office is the most important one.
42:29And, Suzanne, if you were going to give advice to investors, maybe what are they doing wrong in other markets
42:37or what do you think they should be doing more of?
42:42It's a flip of both coins there.
42:43Sorry, that's two questions in one.
42:45What are investors doing wrong?
42:49I think, look, all of the big U.S. funds are in London, and that's ultimately great for founders.
42:55It means that they don't have to get on a plane to San Francisco to get exposure to the capital
43:02that is still probably most willing globally to take significant risk.
43:08But I think, you know, still in the U.K., it is pretty challenging to raise serious capital if you
43:16are outside London, Oxford, Cambridge.
43:20I think we are starting to see that in second- and third-tier U.K. cities, there are some
43:26really strong businesses emerging,
43:28of course out of the universities, but also unrelated to universities as well,
43:33because I couldn't agree more that what separates great founders from decent founders at the moment
43:40is just sheer execution, and there is limited correlation between ability to execute and where you're based.
43:48Yeah, I completely agree.
43:50And Elodie, if we're thinking about ecosystem leaders, are they measuring the right thing?
43:57You know, we have a lot of, you know, we want to have 30 unicorns by X, or we want
44:03to have this, that, you know.
44:05What should ecosystem leaders be thinking about right now, and what should they be measuring to make sure that the
44:11growth is realistic?
44:14So we love metrics, and we measure a lot of them.
44:21I think, of course, attractiveness, as we are building a new ecosystem, is very important.
44:26Last year, we managed to get more than 5,000 applications of startups with a growth of more than 60
44:32% compared to the year before.
44:34But the point is not about the quantity.
44:36I think the point is about the quality.
44:38And summarizing, you know, what we've been discussing previously is that how you are able to build a successful venture,
44:48how you are able to measure the exits, you know, how you are able to measure, like, real valuation of
44:54these companies.
44:55And I think the fact that our community have been able, you know, to constantly fundraise and have, like, still
45:05access to the market, you know,
45:08especially when we went for that wintertime, you know, is an important sign that the region is very active, you
45:18know,
45:18is growing maybe faster than other regions in the world.
45:22And I think that's the sign that we want to send to the founders, you know, especially in that AI
45:31vertical,
45:31is that we have already all the tools, you know, and it's just the right time to come and be
45:38able to embrace the growth that this wave will have as an impact in our economy.
45:43I was saying that today I represent 13% of our current GDP.
45:48We are expected by 2030 to represent more than 40%.
45:52So we're speaking about a market of, like, nearly 45 billion USD.
45:58This is a huge growth to embrace.
46:01Yeah, that's great.
46:02That's really a growth, isn't it?
46:05Suzanne, I'm going to ask you, where do you think people are missing the biggest opportunity in AI right now?
46:13Well, good question.
46:17I think we think there are lots of opportunities still in sort of unsexy spaces or spaces that are going
46:25to take a long time to play out.
46:27I think one of the challenges of, you know, Anthropic and Lovable and 11 Labs growing so exceptionally quickly at
46:35rates we've just never seen before
46:37is that if you're trying to raise for a fusion startup or something in the deep tech space,
46:44which is going to take five-plus years until you get close to commercialization,
46:51that can seem pretty unattractive at the moment.
46:53And as a sovereign fund, we can take those longer-term risks in a longer-term view.
47:00But it's probably more challenging to find really high-quality co-investors for those opportunities right now.
47:08How are you going to do that, then?
47:10What's the plan to bring in those other investors?
47:13I think what we can do as government is provide things like advanced market commitments so that we can, you
47:21know,
47:21if we say to a chip company we will commit to a seven-, eight-, nine-figure contract when technical milestones
47:28have met,
47:29that, like, fundamentally changes the conversation when they walk into, you know,
47:35the investment committee at their next fundraising round where they can say,
47:39look, we have government as our first customer and, you know,
47:44we will probably be a serious reference customer and other customers will hopefully follow.
47:48So, you know, we can pull some levers that only government can pull to hopefully change founders' fundraising trajectory.
47:54So it's more than just signaling that we think this is a good company.
47:58It's actually putting, you know, the demand on the table saying we are going to buy from this company,
48:06which completely changes the way that anyone would be looking at it.
48:10And I think that's something that's quite unique with what you're doing at Sovereign AI.
48:13So a lot of organizations, governments will say, you know, here's our top 50 companies.
48:19That's it.
48:20And it's a great signal for investors, but it's not saying, you know,
48:24we've already got customer of X, you know, ministry.
48:28And Jarek, I'll just come to you for the last few points.
48:31If you, if there's policymakers in the room right now,
48:35tell us what do founders need the most to succeed in this current era?
48:42Do they need to get out of the way or do they need to have more Sovereign AI?
48:46I think founders have to rely on themselves.
48:49I mean, first and foremost, I think no founders should expect support from governments.
48:53That is kind of my central thesis about the market in general.
48:56Well, but I think AI becomes infrastructure.
49:01If we look at how public markets in the U.S. have grown over the last years,
49:06this is all driven by AI.
49:08This is all driven by tech.
49:09And we kind of all tend to speak about AI in our bubble here.
49:13I don't think kind of the mainstream politics and the understanding and governments across Europe specifically
49:19has yet reached that level that is required for this importance of investment that is going in there.
49:27And yes, amazing that the Sovereign AI fund is being launched in the U.K.
49:33Maybe it should be $5 billion or $50 billion rather than $500 million.
49:38And if we look at, I don't know, I would love somebody to make this study of how often prime
49:43ministers
49:44in different countries have used the word AI throughout the year and maybe compare that and do a little bit
49:50of a competition.
49:51I think we really have to build this mentality that this is what is going to be defining our economies
49:58in the next decade
50:00and how basically work each and every day on creating this ecosystem.
50:06And that's everything basically, like making it easy to open up companies, making it easy to make them investable,
50:16make sure that the labor market and the labor laws work towards that,
50:22make sure that AI regulation is appropriate and competitive across continents,
50:27like creating this whole thing, but also really preparing the society for that change
50:34and creating a, like basically some love for the tech companies out there in the society.
50:42I think we really need that.
50:45And that takes us a little at a time, just a minute over.
50:50And I think that's a great stopping point for us is for ecosystems.
50:54Let's not wait to see what happens in Silicon Valley.
50:57Let's drive our growth.
50:59Otherwise, you know, in two years, we're 10 years behind the valley.
51:02Basically, it's never, we will never catch up if we don't start taking risks
51:06and working towards, you know, finding these amazing founders, investing into them
51:11and really trying to have that as a global community.
51:15But thank you very much for your attention, everyone.
51:18And thank you very much for our panelists.
51:20It was a great session.
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