As AI accelerates worldwide, Europe finds itself at a crossroads. While the U.S. and China sprint ahead, European entrepreneurs and researchers are caught in a growing frustration—one fueled by bureaucratic hurdles, slow adoption, and an ecosystem that seems to favor regulation over innovation.
To explore this further, we asked Humberto from Rows.com to share his perspective on Europe’s positioning in AI and the rising frustration among its tech builders. His take? While there’s momentum in France’s AI scene, new startup initiatives like Project Europe, and promising investment trends, Europe still faces deep structural challenges that hold it back.
Here’s what Humberto had to say:
Europe Hits the Panic Button
The U.S. and China are sprinting ahead technically and wealth wise (GDP growth). Europe looks flat down and diverging from the front pack.
The EU looks more keen to regulate and tax than to let revolutions play out. The headlines have long painted a picture of frustration: brilliant talent, strong research, but little product adoption to show for it.
I'm an entrepreneur and a skeptic. I view the new European enthusiasm on AI as premature. We have reasons to hope: we’re improving, and the solution isn’t very hard. But we’re not there.
The Roots of Frustration
Europe’s AI struggle isn’t new. We’re a continent rich in academic excellence and we have a super strong, educated middle class that can double as builders and clients. The problem is that the commercialization and adoption of technology at scale is weak.
As an entrepreneur, I strongly believe that the *only* practical problem we have is one of excess Bureaucracy, which stems from a disbelief in the SMBs and entrepreneurs. With bureaucracy we get fragmented markets, organizational overhead, costs and loss opportunities. Bureaucracy is regressive, that is, it affects smaller and poorer companies who can’t spend on lawyers and consultants to navigate red tape. So we entrepreneurs know that this complexity is putting us at a stupid disadvantage vs. the old incumbent players. This creates disbelief. Then, it is the disbelief that generates a brain drain toward U.S. tech giants and U.S. startups. European entrepreneurs do great in the US.
As an example, just last week we at Rows received a *mandatory* Survey about Research & Development done at our Company. The survey is fine to a degree but then at the end it asks for a list of every employee, allocation to research etc. It’s absurd. That is just one of many, many examples. So yes, the frustration is real.
And this frustration contaminates the most important part of a company: selling valuable products and services to relevant customers. When we manage red tape we stop pursuing deals, we’re telling our teams and investors “yes, this paperwork matters”. (It shouldn’t matter).
1) The French AI Movement
France has become the best of Europe in the AI space, at least so far. This is starting a kind of AI nationalism, rooted in open research, public-private cooperation, and strong technical depth. Institutions like Inria and startups like Mistral are signaling that Europe can build world-class AI. We will see about that later on.
But there is an air of pragmatism: just one simple grand declaration, “AI is important”, and then back to building. President Macron has also announced Billions towards AI research and projects. Yet one can imagine that the French approach is too unfocused on the market — are the early adopters really asking for sovereign, modular, open alternatives? Aren’t we just looking for the best Coding tools, Meme generators, etc? It’s ok to play a different game, but the more we try to coin a market based on EU values and not on Client dollars, the riskier the approach becomes.
Still, it’s a great start. The French have focused on AI.
2) Project Europe & the New Builders
Project Europe is now creating a hybrid YC/ Thiel fellowship. It’s aimed at picking the youngest, most promising people and giving them money and contacts to succeed. Pretty nice and simple.
3) EU Inc
In parallel, the EU Inc project seems to be a part of the Bureaucracy solution. EU Inc is about letting people open a company that legally works uniformly across Europe. This treats the continent like a single digital economy and building platforms that actually scale.
This is great, yet again the skeptic in me says it’s not the right thing. The US doesn’t have a single Inc model, there’s the Delaware one, Texas, etc. So, really, we should let countries compete on legal structures, who can create the best for a startup? The problem in my view is the operating model, on many countries even for a company of 1 person you’re forced to use lawyers, accountants, notaries, and public officials far more than in the US. Usually each country has a digital/ expedited process, but the problems compound if you’re not a national — in Germany, you will need to register locally, and notaries will need to read documents to you in both German and English if you don’t speak the language. We should mandate that each country aggressively de-bureaucratizes.. And then, if there’s a common platform, standardize.
So, sure, give me the EU Inc.. But it’s not enough.
4) Investment and Entrepreneurs
Europe is growing a lot in entrepreneurs and VC capital. This is great.
I see it in the financing rounds of newer companies, that get better terms and smarter help than what me and many others got 10-15 years ago.
There are lots of informal groups on WhatsApp discussing new ideas, new companies, are you investing in X and Y and Z? I’ve seen a handful of fantastic new AI companies in the last month.
I also see entrepreneurs moving faster in the AI world, changing products, slashing old roadmaps.
This is very very positive, and it means we are efficient in evaluating opportunities, and that there’s enough job security (exits, VC money, larger companies) that kids seem to be pursuing that.
And this is all good.
The Skeptic’s Take
So where does this leave us?
I’m not going to pretend this is a solved problem. Europe still moves slower than it should. Many initiatives risk being all talk. The funding gap is real. And cultural aversion to risk won’t disappear overnight. This affects the market, affects sales. We should be buying software from each other instead of solving certifications, regulations. Not when we’re super small.