France is positioning itself as a leading force in artificial intelligence.

The Viva Technology conference in Paris last week showcased France’s advancements in AI, generating considerable excitement.

Much of the buzz centered around the French AI firm H, formerly known as Holistic, which secured $220 million in seed funding from major investors, including U.S. tech giant Amazon and former Google CEO Eric Schmidt.

A notable trend among French AI firms receiving substantial investments is the inclusion of prominent U.S. tech companies as shareholders. Recently, France saw a surge of new private investments, highlighted by Microsoft's record commitment of 4 billion euros ($4.4 billion) to the country.

AI at Viva Tech AI was a dominant theme at Viva Tech. Beyond the prominent pink “VIVA” sign, there was “AI Avenue,” flanked by U.S. tech firms like Salesforce and AWS.

Generative AI featured prominently, even from unexpected companies. For instance, French beauty giant L’Oreal presented its AI-powered beauty assistant “BeautyGenius” at a central booth in the Porte de Versailles venue.

The success of Viva Tech has become crucial for France in its quest to become a major tech and AI hub, competing with the U.S. and China.

“France is the leader on artificial intelligence in Europe,” Bruno Le Maire, France’s finance minister, stated. He emphasised that while U.S. tech giants play a role, “we want to have our own artificial intelligence being created and developed in France.”

Regarding Microsoft's investment, Le Maire stated, “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 robust AI research and development ecosystem, home to significant 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 nation nurtures a thriving startup scene, marked by significant strides in AI,” Grass added. Imran Ghory, partner at Blossom Capital, noted that while France excels in research and academia, it has struggled to channel 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.”

Pursuing Tech Leadership French President Emmanuel Macron stated that his country is “leading the tech industry in Europe.” However, he acknowledged Europe’s lag behind the U.S. and emphasised the need for more “big players.” “It’s insane to have a world where the big giants just come from China and the U.S,” Macron said at the Elysee Palace. He praised French AI firms like Mistral and H, backed by U.S. tech giants like Microsoft.

Last week, Macron met with notable figures like 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, at the Elysee to discuss making Paris a global AI hub.

Maurice Levy, CEO of Publicis Groupe, confirmed that France has the potential to become a top five country for AI development. Levy asserted that France is “determined” to bridge the gap between the U.S., China, and Europe in AI.

France “can be part of the five biggest countries on AI in the world,” following the U.S., China, Israel, and the U.K., Levy said. He highlighted H’s significant funding round as an example of the momentum in French AI. Levy estimated that around 40% of the tech demos at Viva Tech were AI-related. AI is “something which is … not only taking off, but has already taken off quite massively,” he said.

In a discussion last week, Google’s Manyika mentioned that much of the firm’s innovation is sourced from engineers in France. He noted that Google’s recently introduced Gemma AI, a lightweight, open-source model, was developed significantly at the company’s Paris AI hub. According to Dealroom, France accounted for roughly 20% of European AI startup funding in 2023, higher than the 15% average across Europe. However, France is not the European AI leader, as U.K. firms raised more than double the amount of both AI and GenAI investment compared to France.

Balancing Innovation and Regulation Macron stated that Europe’s challenge is to accelerate AI research and development while regulating appropriately. Last week, the EU approved the AI Act, a landmark law regulating artificial intelligence.

Some tech executives warned that overly restrictive regulation could hinder Europe’s AI ambitions. France has criticized the EU AI Act for being too restrictive concerning innovation. Pascal Brier, Capgemini’s chief innovation officer, emphasized the need for regulation to ensure AI doesn’t become too powerful but cautioned against laws that might stifle innovation.

He urged regulators to avoid the “principle of precaution” — the idea that AI makers should avoid actions that could cause harm as a rule.

“There’s no way you can stop AI — it’s only the end of the beginning,” Brier said. “It’s not going to stop there.”