his plan to make Iliad a European AI giant – L’Express

According to the entourage of the 18th French fortune (according to the classification Forbes), this conference is intended to be the antithesis of VivaTech, where the CAC 40 celebrates its digital strategies against a backdrop of a parade of global tech figures thanks to Publicis’ unique interpersonal skills. The event on Friday, November 17 at the Freyssinet hall promises to be a business geek trend, with presentations and technical briefings by Iliad partners and AI specialists. Less than “beautiful”, more men and women who have their hands in the code and in the hardware, the physical infrastructure.

The most anticipated presentation is that of the artificial intelligence laboratory, endowed with 100 million euros. According to Iliad, it intends to play in the same category as a DeepMind. Launched as an independent start-up in 2010, with initial funding of $50 million, DeepMind was acquired by Google in 2014 for half a billion dollars (a bargain, considering that its competitor OpenAI, creator of ChatGPT , is now valued at $90 billion). Over the years, DeepMind has become a widely publicized AI laboratory for having developed an algorithm capable of beating the best Go player in the world or, in a more arid genre but of an otherwise important scope, for having decoded the structure internal molecules with its AlphaFold program. Having become a bottomless pit, DeepMind was reintegrated this year into the fold of Google, which considerably reduced expenses; around 700 million per year anyway… This is Xavier Niel’s model for this laboratory, the partners of which he will reveal as well as the main team, half a dozen world-class researchers.

This structure will be able to rely on the second pillar of the system: the supercomputer managed by a subsidiary of Iliad, created in 1999, Scaleway. Nvidia provided a thousand H100 chips, a strategic threshold in terms of power, to date relatively rare in AI. The Iliad group does not comment on the price of its machine, called “Nabu” (short for Nebuchadnezzar), but the latter swallows up a good part of the remaining 100 million euros, we confirm. It must be said that the price of H100 chips, at the list price of $36,000, even increased by 16% during the month of September alone as demand is strong. The investment is justified: Scaleway claims that its computing capacity will be the largest on the European continent in terms of machines dedicated to AI – other supercomputers, notably used for nuclear physics, are incommensurable, but are directly financed by the States. A first “mini” version of the tool, Jeroboam, has already been put into service and has been used in training small models, says Scaleway. Without specifying the beneficiaries.

Third component of the whole, and not the least: Scaleway also plans to become “the largest European public cloud in artificial intelligence”, its general director, Damien Lucas, tells L’Express. In addition to training the models, the firm wishes to manage what is called “inference” within its infrastructures. Or the daily use of chatbots or image generators, for example. In total, Iliad currently has eight data centers, divided between its Scaleway and Free Pro entities. This summer, the group had discreetly overseen a new entity dedicated to all of Iliad’s data centers and called “OpCore”, responsible for working on the architecture of these very energy-intensive buildings.

But the burning question remains the scope of Xavier Niel’s overall investment of 200 million euros. A significant sum, but which remains lilliputian compared to those disbursed by the “hyperscalars” which are AWS (Amazon’s cloud subsidiary), Microsoft and Google, whose capital expenditures (capex) are soaring at a rate of 15 to 20% per year. They are expected to reach $116 billion in 2024, according to a Bank of America study. “The investment that we announced is only the first,” retorts Damien Lucas. A “phase 2” of the Niel plan, still secret, would be in the pipeline. Compared to these large generalist clouds, engaged in an investment race to take the positions of tomorrow, Scaleway will nevertheless have to show a lot of imagination – and commercial aggressiveness – to find ultra-specialized niches where it will offer better and cheaper than the giants.

One lever can be activated quite quickly: that of sovereignty, a concern that is growing in importance in France. For companies, this means relying, for the storage of their data, on local clouds that comply with European Union rules. To date, many of them use American service providers under the Cloud Act. In short: this valuable data can be consulted by the American authorities in certain cases. “Without sovereign infrastructure, we risk limiting companies which have significant regulatory requirements”, in health or defense, for example, analyzes Stéphane Roder, head of the AI ​​Builders agency.

Iliad also wants to take advantage of the political “momentum” around AI (France recently provided an additional 500 million euros to help the sector develop), with the aim of negotiating some advantages. These could notably take the form of a rebate on energy prices, because training models and using them requires a lot of electricity. Met by L’Express, Guillaume Avrin, national coordinator for artificial intelligence, considered this type of device possible in order to gain competitiveness, and potentially useful to other French players, such as OVHcloud, also launched in the market of AI. France also has the advantage of benefiting from very largely carbon-free energy, an important point for businesses. So much so that France is currently rather well positioned in the great AI race. “We are lucky to have an incredible ecosystem in Paris,” says Matthieu Rouif, co-founder of the PhotoRoom application. From mathematics training, among the best in the world, to quality data and even start-ups, many of which – it is no coincidence – are linked in one way or another to serial investor Xavier Niel. This is the last, major ace up the sleeve of Iliad and Scaleway.

The Mistral AI start-ups, which a current funding round could value at $2 billion, but also Poolside, Nabla, and PhotoRoom have all been financed at various stages by Niel and its subsidiaries Kima Ventures or NJJ Capital. The circuit between Scaleway and Kima is already a “loop that works well”, indicates Jean de la Rochebrochard, manager of the businessman’s fund, specializing in seed investments (participations of a few tens or hundreds of thousands of euros) . We can expect that these “in-house” nuggets will be placed in the showcase of the new Scaleway cloud and act as “talent magnets”, points out the boss of Kima Ventures. Iliad’s envelope also contains several million reserved for start-ups. Nothing surprising about that. Niel has carved out a reputation in French Tech, with his various investments in bets that have become unicorns, such as Alan, Deezer or Sorare. Then via its schools: 42, the most tech, which is spreading all over the world, the Albert School, around data, brand new (founded in 2022), or the Eemi, the trade school of Internet, launched in 2011 with the bosses of Meetic and Vente-privée (now Veepee). Finally, of course, via the Station F start-up incubator, a real totem in which Hugging Face has grown, this open source AI hub today valued at $4.5 billion, and which is already boosting everything European ecosystem. “Twenty-five years ago, the revolution was called the Internet, and we were there,” declared Xavier Niel when announcing his investment of 200 million euros. By positioning itself again on basic infrastructures, the father of the Freebox seems determined to pull the same stunt in artificial intelligence.