Investing in french AI startups might get harder

    Investing in french AI startups might get harder
    Actu IA
    investinginfrenchaistartups

    Governments around the world are becoming increasingly aware of the strategic and sensitive nature of AI-based technologies. This awareness is reflected in plans and announcements of investment in these technologies, but there is also a recent shift towards increased control.

    Investments in french AI startups will be subject to prior authorization.

    France has just started controlling foreign investments in AI companies. The decree No. 2018-1057 took effect on January 1, 2019. It aims to subject foreign investments in companies conducting R&D activities in the areas of cybersecurity, artificial intelligence, robotics, additive manufacturing, and semiconductors to prior controls and authorizations.

    According to Bruno Le Maire (Minister of Economy and Finance), the goal of this decree is to protect companies with Research & Development activities in certain technological sectors of the future from hostile acquisitions.

    We talked with startup founders who told us they fear it might put a brake on the French AI ecosystem. An increasing number of startups raised seed money lately. But the funds required to scale from a Proof of concept to an international level AI company are so huge, it is hard to expect a large success without looking for foreign investments.

    Those fears are understandable: In 2013, the French government blocked Yahoo’s acquisition of a majority stake in Dailymotion, which was at that time seen as a good competitor for Youtube. It almost killed Dailymotion’s ambitions.

    Of course, AI is by its nature, sensitive. But is it the best solution? The question is still open.

    The conditions of application of this new decree are not yet fully clear and we are waiting for the government to clarify things in order to reassure both founders and investors.

    The original french version of this article is available here