France is emerging as a European powerhouse in artificial intelligence (AI), with 751 AI startups active by the end of 2024. French AI startups have raised a remarkable €13 billion since their inception, including €2 billion in 2024 alone.
According to the latest report by the French tech association France Digitale, the number of AI startups operating in the country has surged to 751, marking a 27% increase compared to the previous year. In comparison, Germany has 687 AI startups.
“As a European technology leader, artificial intelligence is at the heart of our strategy to enable our partners to reap all the benefits today and tomorrow, ” says Cyril Malargé, CEO of Sopra Steria—the company that supported the French AI Startups Landscape 2025 report by France Digitale.
According to this report:
- Paris remains the undisputed hub for AI startups, with 63% of them based in the Île-de-France region. Occitanie follows at 6.5%, with Auvergne-Rhône-Alpes (6.1%) and Provence-Alpes-Côte-d’Azur (5.7%) rounding out the top regions.
- French AI startups have raised nearly €13 billion since their inception, with 65% securing funding, primarily in Series A rounds.
- 24 startups have raised over €100 million in funding—2.5 times more than in 2023.
- AI startups are now a major driver of job creation in France, employing nearly 36,000 people. What’s more, 92% of these startups plan to hire more staff in the coming year, adding about 3,500 new jobs.
- While 43% of these startups focus on generative AI, nearly 47% are still developing solutions based on traditional AI technologies, such as machine learning, deep learning, and computer vision.
AI fuels France’s startup ecosystem
The State of the French Tech Ecosystem 2024 report, authored by Alexandre Dewez of 20VC, highlights AI as the primary growth engine of French tech. In 2024, French startups raised €7.1 billion (US$7.3 billion) across 518 funding rounds, a 3% year-over-year increase. Of this total, €2 billion was directed specifically towards AI ventures.
AI accounted for 27% of all capital raised, surging by 82% compared to 2023, according to this report. Without AI investments, the ecosystem would have declined by 11%, underscoring the sector’s dominant role in fueling the country’s tech innovation.
Key AI Players: The AI boom is exemplified by the rise of key players like Hugging Face, Mistral AI, and Poolside. These companies, though founded by French entrepreneurs, have established strong presences in the United States.
Mistral AI, launched in early 2023, has quickly become a European rival to OpenAI with its innovative open-source large language model (LLM). Founded in 2023 by three former engineers from DeepMind and Meta, the AI startup reached $6 billion valuation in just one year. Mistral recently opened its office in Palo Alto in 2024 to expand its presence in the U.S.
French President Emmanuel Macron praised Mistral as a prime example of Europe’s ability to compete with the U.S. and China in the development of cutting-edge AI. French startups have gained significant attention since 2017 when President Macron announced his ambition to turn his country into Europe’s “startup nation” and government support, including tax breaks and initiatives to attract top talent and investment. Big tech players like Amazon, Microsoft, and Google have established a strong presence in France, further cementing its status as a key hub for EU innovation.
How Paris became European AI hub
Paris has emerged as the European hub for AI, supported by a world-class research infrastructure and the presence of tech giants such as Google and Meta. The French capital is home to some of the most influential AI startups in Europe, including Dataiku, HuggingFace, and Mistral, which have garnered international recognition.
The development of AI technologies in France is also attributed to the country’s top engineering schools, its dynamic research ecosystem, and its supportive government policies and tax breaks. These factors have created fertile ground for French startups to thrive, attracting investment from both local and international venture capitalists.
45 unicorns and growing: The French tech ecosystem now boasts 45 unicorns, with three new additions in 2024: Pennylane, Pigment, and Poolside. Of these, 71% are likely to maintain their unicorn status, while five—Backmarket, Dataiku, Doctolib, Content Square, and Qonto—are poised for potential IPOs.
Growth despite challenges
Despite France’s strong position as AI leader in Europea, its startups face significant hurdles. Access to data is a top concern for 1 in 4 startups, as they compete with non-European rivals. The France Digitale report calls for simplifying access to public and protected data, alongside harmonizing European and non-European regulations.
Computing power is an issue for 11% of French startups, while 13% cite recruitment challenges. Energy consumption has also become a concern for 10% of startups as competition for resources with larger companies intensifies.
“France is the European hub for AI startups,” says Maya Noël, CEO of France Digitale. “However, this national scale is not realistic for anyone: faced with the increased competitiveness of the United States, Europe must now constitute a united ecosystem that offers turnkey solutions to support the deployment of AI in businesses and public administrations.”
Despite these obstacles, many French startups feel more confident than their European counterparts to tackle these challenges. France ranks as the third-largest tech ecosystem in Europe, following the UK and Germany, with Paris holding the second spot as the top tech hub, only behind London.
Key Highlights from State of the French Tech Ecosystem 2024
- €7.1 billion raised by French startups across 518 funding rounds (+3% YoY), despite an 18% decline in the number of rounds.
- AI was the major growth driver, accounting for 27% of total funding, with investment in AI startups up 82% YoY.
- Paris emerges as Europe’s second-largest tech hub after London, supported by top engineering schools and tech giants like Google and Meta. The city is home to AI unicorns such as Dataiku, HuggingFace, Mistral, Owkin, and Poolside.
- France now has 45 unicorns, with three new additions in 2024: Pennylane, Pigment, and Poolside.
- 71% of these unicorns are likely to maintain their $1B+ valuations. Only five startups—Backmarket, Dataiku, Doctolib, Content Square, and Qonto—are IPO-ready, with €300M+ ARR and 20-30% YoY growth.
- AI drives investment in key sectors like SaaS, Cloud, Energy, and Finance. Capital was primarily invested in:
- Business Models: SaaS (60%), Hardware (14%), and Services (10%).
- Sectors: Cloud (21%), Energy (17%), Finance (14%), and Industrials (10%).
- Themes: Crypto, Manufacturing, Insurance, EVs, Space, and ESG Reporting.
- AI, climate tech, finance and vertical software lead French startup investment, with €3.1 billion (45% of total) allocated to France’s top 15 rounds.
- France is the third-largest tech ecosystem in Europe, behind the UK and Germany.
