Founded in 2022, ElevenLabs is a London-based AI Voice Generation startup. It competes with SpeechMatics and Hume Ai.
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Artificial intelligence companies are the hottest ticket items in today’s startup ecosystem, but the pace of change is dominated by Openai and human development. For startups built on top of models, it’s a sink or a swim.
As the US is currently surged ahead with the large-scale language model (LLM) race that requires large-scale checks, the European opportunity lies in building tools that make AI useful, known as the application layer.
“It’s also where most of the profits are expected to be made in the future,” Robert Lacher, founding partner of Visionarys Club, told CNBC’s Squawk Box Europe earlier this year.
According to Consultancy EY, the generator AI company won $49.2 billion in venture capital (VC) investment in the first half of 2025, surpassing $44.2 billion in 2024 over 2024. The US is responsible for most of this, accounting for 97% of the transaction value and 62% of the volume. Europe accounted for just 2% of its value, but 23% of its volume.
Risk appetite among continental VC investors is typically lower than in the US, but market fragmentation has long poses the challenges that startups are trying to expand quickly. In the midst of the hangover and economic downturn since the 2021 tech boom, steady growth and healthy business metrics are also focused in Europe. AI still draws the eyeballs, but it pales in comparison to the US
Currently, frequent updates of AI models such as Openai’s ChatGpt and Anthropic’s Claude are forcing companies built on them to risk repetition or delay faster.
Europe has its own LLM company, including Dutch chipmaker ASML, which has been positioned as a competitor of Mistral-Open Source, a French startup that has raised 1.7 billion euros ($2 billion) in capital so far.
“The speed of innovation, the speed of product, the speed of distribution actually beats everything else,” Bryan Kim, a partner at VC company Andreessen Horowitz, told CNBC’s “Squawk Box Europe” on Thursday.
Sweden’s Lovable is a “atmosphere coding” platform that allows others to use AI to build apps and websites, and AI agent startup Sana is an example of such a company using AI. Meanwhile, London’s AI video generation startup Synthesia and synthetic audio company ElevenLabs also have certain AI applications. However, the latter later built its own LLM.
But “What does that mean when the products and technologies that rely on changes each month are actually dependent on? Do you expect to move slower than that and win the game?” Kim said.
“What I came in is actually the moat at this current point in AI development. When the model layer is at a point where it’s a little more stable, we can talk about other things, but for now, momentum is the only moat I see,” he added.
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Momentum and constant ability to repetitively often lead to cash in bags.
“When you look at Europeans, we are innovative, we are romantic and resourceful,” Jean La Rochebrochard, managing director of Kima Ventures, told “Squawk Box Europe” on Thursday. But “it’s difficult to compete with a country with a much higher appetite for risk, a much higher amount of capital and talent,” he said.
Larochevrocaard is still optimistic that Europe is home to the next big winner. For him, it is something to see founders who have returned to build outside of Europe and start another venture.
“We all hope to be one of these giants, one of these $100 billion companies in Europe, just like Mistral did in the UK. Investors added.
In fact, British AI cloud company NSCALE has won $433 million in new funds shortly after Europe’s largest $1.1 billion Series B. However, like Mistral, NSCALE is a game of AI infrastructure rather than an application layer. AI sovereignty is a timely development as it continues to attract political and investor attention.
For adorable CEO Anton Osica, it’s much easier. “What we have to do in Europe is to change the way we think that it is possible,” he told Squawk Box Europe on Tuesday.
“Traditionally, it’s no longer a bottleneck due to access to technical talent volumes, access to capital,” he argued.
For example, Osika’s own company can act as a technical co-founder of a CEO if it is needed. Meanwhile, Lovable is luring top talent from the US to Sweden to work at a startup, Osika said.
He added: “We hire in Europe much faster than our counterparts.
