Glasses of champagne, computers. In the Marais, two stars of French generative AI, Nabla and Mistral AI, are holding a show. We joke about the “X”, we tease the Mistral chatbot. The conversations are witty, the faces enthusiastic. Well Named. The French know that generative AI has just reset the counters. No one has much experience with generative AI yet. A unique opportunity for Paris. Because “France is one of the world leaders in AI”, underlines Laura Connell, partner of the European fund Atomico. More than 600 AI start-ups have pushed for it, including 141 in GenAI, reveals a recent report from Wavestone. “And among them, several are specialized in foundation models, the cornerstone of this market,” underlines Chadi Hantouche, partner of the firm.
The most powerful model of Mistral AI today even follows that of OpenAI. The Frenchman also completed a spectacular fundraising (385 million euros) last December. At the start of the year, Photoroom and Nabla also achieved significant funding rounds. “France has become very attractive,” summarizes Olivier Martret, partner of Serena Capital. Between 2019 and 2023, notes Dealroom, it is also the one which attracted the most venture capital investment in generative AI after the United States and Israel.
Reform of the labor market and the ISF, flat tax… Emmanuel Macron’s reforms have, it must be said, put Paris back on the map in recent years. The action of Bpifrance and the French Tech mission, as well as the myriad of measures designed for French start-ups (Tibi initiative, French Tech Visa, etc.) have accelerated the movement. The projects of seasoned entrepreneurs, such as Xavier Niel with the IA Kyutai laboratory, are the last stage of the rocket.
In the race for artificial intelligence, France has a vital asset: “Its excellent training in engineering and mathematics,” points out Vincent Rapp, AI manager at Bpifrance. Polytechnique, the MVA master’s degree from Saclay… The French sectors transmit unique knowledge which flourishes in cutting-edge centers such as Inria. By opening laboratories in Paris, Gafam also helped to keep our brains on site. Essential because in the AI game, each domino counts. “Small teams can make huge advances,” emphasizes Gabriel Hubert, co-founder of Dust. Mistral, for example, only has around twenty employees.
Keeping our French generative AI nuggets
“In 2024, global regulators understand the effects of tech much better,” explains Marianne Tordeux Bitker, director of public affairs at France Digitale. If they were late to detect the challenges to competition posed by certain digital mechanisms of the last decade (mobile application store, social networks, etc.), they will not be fooled twice. OpenAI’s partnership with Microsoft is already being studied closely. Vigilance which should encourage digital giants not to sideline their rivals with unfair processes.
Paris must not, however, rest on its laurels. The Gulf countries are throwing themselves into AI with a lot of petrodollars. The United States is leading the way, driven by its deep-pocketed VCs and their cloud giants. “And China is a world leader in traditional AI, even if it lags behind in the more recent field of generative AI,” underlines George Lee, co-head of applied innovation at Goldman Sachs. To maintain and expand its lead, France has several projects to carry out urgently. As we saw with Mistral AI, European investors are desperately rare in large funding rounds.
The reassuring point? “Foreign investors are no longer asking the French to move their headquarters to the United States,” observes Philippe Englebert, investment banker and former economic advisor to the President of the Republic. We must nevertheless mobilize more French and European private actors around our gems of generative AI. “It is important that these companies remain French. However, in the years to come, they will need to raise billions, even tens of billions of euros,” underlines Bercy, who last year pushed for the creation of a generative AI committee.
Behind the virtual magic
The latter interviewed 600 experts and consulted 7,000 citizens to establish an ambitious report submitted to Emmanuel Macron on March 13. He recommends, for example, redirecting French savings towards innovation and creating a France & IA fund of 10 billion euros. And to consolidate our “gray matter”, to triple the number of students trained in AI by 2030 and to increase the salaries of researchers in this sector. These big names are in fact increasingly courted abroad, with checks sometimes ten times higher.
The issue of data, the spiritual nourishment of AI, must also be handled with skill. It is good that France and Europe do not let just anyone do anything with our data. But padlocking them would be shooting yourself in the foot. “Our very centralized health system is an exceptional source of data likely to enable a lot of innovation in medical AI,” argues Cédric O, former Secretary of State for Digital Affairs, now advisor to Mistral AI. Utility data is another. And in industry, companies have everything to gain from joining forces, sector by sector, to create pools of data quality.
Let’s also keep in mind that behind this virtual “magic” hides a host of very tangible equipment: data center, specialized chips… In this area, France, like the rest of the EU, is significantly behind the United States. “We must strengthen the network of European supercomputers by taking into account the specific needs for generative AI,” observes Laurent Daudet, CEO and co-founder of LightOn. The IA committee recommends encouraging the construction of computing centers on French soil, via public or private funding. “France’s carbon-free energy can be a decisive asset,” observes Bernard Liautaud, director of the Balderton Capital investment fund. AI players, like others, need to keep their greenhouse gas emissions under control. Betting on disruptive innovations in the field is also, in the long term, a way to obtain a seat at the big table. The progress of start-ups such as SiPearl or Kalray should therefore be followed carefully.
The French economy boosted by AI
With its energy giants and utilities (EDF, Schneider, Veolia-Suez, etc.), France also has a great opportunity to seize in AI in the service of ecology. “Artificial intelligence knows how to manage complex systems, with multiple factors. Ideal for optimizing transport, supply chains or agricultural crops. It can constitute a very powerful tool in the fight against climate change,” emphasizes Gilles Babinet, co-president of the National Digital Council. France’s last project, the most important: training the population in the use of these AI. Show the areas in which they shine, those where they do stupid things. Raise awareness of new forms of scams and the disinformation they cause, by making the creation of fake videos and fake voices of real people childish.
“AI will allow companies to be more productive and build richer offers,” underlines Vincent Luciani, CEO of Artefact, an AI consultancy firm. Its breathtaking advances in real-time translation also give businesses powerful tools to reach consumers in other countries. Economist Philippe Aghion reveals in the report on generative AI that in ten years, it could increase France’s GDP by 250 to 420 billion euros. But in the four corners of the globe, “in all sectors, companies will see their titles put at stake,” warns Vincent Luciani. Those who seize it will gain new market share and protect their jobs. The others, beware of falling.
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