The glaring number to me is only 5% of VC funds vs 52% in the US. That's 10x more opportunity despite roughly comparable economies. As long as that is true, it seems like it will always be impossible to get an organic startup industry working in the EU. Any startup that is any good will almost certainly end up getting a round of investment from the US and most likely move their base of operations there.
I wonder if recent US actions will start to influence this as there now appears to be more risk in sending your money to the US or founding your company there as a foreign entity than there used to be.
Not just startups or funding. Google alone has more AI compute than China and the EU combined.
There's no shortage of capital in Europe. But nobody wants to take the risk. Meanwhile in the US, people are putting 10-100x the capital at risk. So you can say what you want about it looking scary to you to invest in the US, but the people with capital to invest clearly don't see it that way.
More often when you hear VCs give interviews, they are saying the opposite: that never-ending EU regulations introduce more business risk than anything the US president could possibly do.
I’m not all that convinced on the regulation part.
Ultimately it’s all about investing money to create real assets that generate cash flows. One can side step regulations to some extent whilst developing a product (nobody cares/notices until you are actually growing fast) and then deal with regulations later. Uber already showed this and the leading AI firms are following the same act - having ripped off a lot of content but nobody threw a fit until a legit asset came out of it.
Yes, let's ignore regulations that provide people with stable jobs, societies, and countries. Afterall what good is democracy when the alternative is making more money?
A lot of these are mostly well-meaning but have backfired. The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them.
It's counterintuitive but if you allow "failing fast", you lower risk of new engagements, and this allows for more speculative bets on ideas and people.
Make it difficult to evict tenants? Expect more stringent requirements from landlords
Enact rent control? Initial rents are going up, new builds are are disincentivized.
I'm not saying these regulations are unilaterally bad - I'm saying don't be surprised that there are 2nd-order effects that are arguably just as bad, if not worse.
I would push back on a few things from what you mentioned.
> The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them.
For European startups it’s different motivation. Lower salaries than in USA are an advantage, but job security isn’t a show stopper. First team is hired in fixed contracts, which may be converted to permanent with growth. In scaling phase you add external support, with e.c. 20% of workforce coming from outstaffing, so that you can react on the market and scale down when needed. If you are big enough to be called international business, you will not hire in one of the most expensive locations in the world (USA) unless you have a good reason. There exist other easy-to-fire tech hubs, and it’s not a big problem in Europe anyway (it’s just some more effort to execute, but even with payouts it’s probably cheaper than in US).
> Make it difficult to evict tenants? Expect more stringent requirements from landlords
In Europe there’s less homeless people. It doesn’t work like that.
>Enact rent control? Initial rents are going up, new builds are disincentivized.
It’s not rent controls that make markets inefficient. They are reaction to NIMBY regulations and disincentivized home ownership like in Germany.
Root cause is uncontrolled extraction of scarce resource (land) and the solution is actually to scale down for-profit rental market while aggressively subsidizing ownership and construction.
This is something you talk to people about that are in the western world but outside of the US (which includes me) but whenever I have the conversation people just can't grasp it.
The US, by having bad worker protections and privacy abusing tech companies, etc. have been able to pave the way for extreme amounts of innovation that just wouldn't happen anywhere else. The rest of the world then effectively has innovation subsidized since they import the finished product.
I also found most US startup opportunities to be practically enabled by shitty service provided by the incumbents, whether it is the state or the banks or the healthcare system.
Take Cost Plus Drugs, for instance. Or companies enabling faster cash transfers over the internet, like Paypal. Or healthcare insurance plans from Oscar Health or prescriptions from Truepill. Or videos made by Khan Academy, which are currently in use in many schools across the US.
Makes sense. You’re saying why would regulations matter when clearly they can just be ignored.
For venture ultimately it’s a soulless moneyman’s game. Really they have to pick winners, and anybody can look at the landscape and see there’s just not gonna be a Pierre Zuckerberg or a Klaus Kalanick. And if there ever is, he’ll need to raise lots of money anyway, which would come from venture.
> there’s just not gonna be a Pierre Zuckerberg or a Klaus Kalanick
Which is very much a positive. Those two aren’t a boon to humanity, they very much made everything worse at a global scale. We need fewer people emulating them, not more.
I don’t consider VC investments to be particularly beneficial to the world. This idea of “let’s use capital to make it faster for people to exploit others with the only goal of generating more capital” does more harm than good.
That's why Mistral is not focused on raising venture capital. Instead, they prioritize securing government contracts; hence their significant political lobbying efforts.
The funding allocation is a reflection of different cultures really.
I’m from the UK but there’s no way there’s the same density, drive, and hunger to take risk, to the extent that you find in US. Also there’s a lot more synergy in the US vs a fragmented Europe.
I’m also from the UK and I think this is a self-fulfilling prophecy.
As a UK founder that has raised in the UK, I have seen our US competitors raise substantially more with substantially less traction, so in future I’m significantly more tempted to look across the pond for raising. It has little to do with my culture vs theirs, and all to do with where the opportunity sits.
Many of the other founders I know with the “drive and hunger” as you put it, have already made the same jump.
> It has little to do with my culture vs theirs, and all to do with where the opportunity sits.
So it does have to do with culture. The US has better culture for starting a business. You can't just divorce the opportunity that came from the culture just to make a point.
there's probably a high correlation between people with the "drive and hunger" to build a startup in the first place with those that would have the "drive and hunger" to relocate overseas to make it successful.
Yet the UK did produce Deepmind. Which you can look at both ways since it got gobbled up by Google. But it at least came from the UK.
I assume the article excludes the UK, I feel like UK has much more of a startup and VC scene than Europe does and I wonder if that is part of the issue : if you do want to create a startup, the London is a better place than mainland Europe. So even startups that for whatever reason won't take US funding still land outside Europe.
There are places with the same entrepreneurial drive that are part of the EU. But look at an LP-facing deck for a VC fund in Europe, and I can't recall ever seeing an investment with a little flag of Poland.
My belief is the underlying dynamics are less about, generalizing about cultures. Like you're right that that's what US VCs say, and collective belief is truth in markets even if it is not truth in reality. The bigger factor is EU, meaning French, Dutch, German, Swiss and Italian capital, are concentrated into the hands of large, opaque family trusts, structured primarily around tax evasion first and foremost, and other feudal issues, rather than minimizing the downsides of real risk or whatever, and that feudal stuff means, why do early stage investing? Without that there's little innovation. Hence Mistral, a growth stage company that everyone is happy making the growth stage, "dot AI" and "dot EU" winner. Presumably for EU sovereign wealth to be forced to buy.
I lead a European owned and operated Data/AI company, Hopsworks. We are the only competitor to Databricks/Snowflake/etc based-in and from Europe. We can still compete, as we have a deep research/industry background (ex-MySQL and KTH folks).
Crossing the chasm is harder from here. Even if you build a great product (we are best at real-time AI) - we had a paper at SIGMOD 2024 where we showed higher thoughput/lower latency by a factor of 4-40X Databricks, AWS Sagemaker, and GCP vertex - we lack the echo chamber. (Try the mental exercise where Databricks' peers acknowledge massive over-performance through a peer-reviewed paper and imagine how much noise it would generate). Still, we can replace our competitor at their largest European customer, Zalando, for real-time AI. But it's a much harder slog than it should be due to the 10X lower round sizes (due to 10X smaller VC fund sizes). European pension funds place way more money in US VC funds than in EU VC funds - that is self-defeating.
I hate that I agree, and yet, I agree. The EU has a giant single market, has a pipeline of elite tech talent from everywhere from Finland in the North on down, has long since settled on English as the lingua franca of business but has plenty of tools to solve i18n, and yet...culturally is just hostile to entrepreneurship in a way that goes beyond reasonable suspicion of fakery. what's that all about?
I don't think it's regulation, btw. Starting and running my company in the UK pre Brexit was way easier than doing it in the US. Keeping the IRS happy is no joke.
Brain drain I expect. All the people who believed in freedom and entrepreneurship have had maybe a century of incentives to leave Europe and head for the US.
Society seems to rely on a tiny pool of overly-motivated people to do most of the work. There has historically been a healthy pipeline and many good reasons to convince them to leave Europe. And apparently sufficient safeguards to stop them building too much if they stay, based on the lack of success the EU has had in tech.
Looking at the US culture, it's not hard to see entrepreneurship as a societal disease.
Let's not act like "entrepreneurship" is necessary at all to develop technology. Western governments simply have no ability to find their own destination as any attempt to get off the US big tech ramp comes with threats to destroy defense treaties, weapons contracts, and tariffs with their major ally.
Hardly anything to do with "entrepreneurship" and more about the insidious nature of US imperialism and how damaging neoliberalism is to the world.
Good on Europeans for rejecting this American blight.
>Good on Europeans for rejecting this American blight.
Reject it? They pay hundreds of billions for it. Every year. For decades now.
Europe runs on American tech, using American and Chinese hardware, powered by American energy, and protected by American defense.
Surely you're confused here, because Europe didn't reject these things, they offshored them and then teased Americans about working so hard. Europe's economic situation right now is borderline catastrophic, mostly because they built a society on someone else's support in the uncannily calm times after the wall fell.
> Looking at the US culture, it's not hard to see entrepreneurship as a societal disease.
It's easy if you're in some nihilistic and cynical echochamber like reddit. For everybody else, entrepreneurship is still quite celebrated and seen as a positive for society.
In Australia one of the most common paths to wealth outside of owning property is literally taking up a trade as an apprentice, then after a couple of years beginning your own plumbing/electrician/brick laying/etc business.
That's still very highly celebrated. Interestingly enough, people with Mediterranean backgrounds also feel this way (there's lots of crossover here btw).
Owning your own business is one of the best things one can do in that culture. There's a story in a Taleb book about a Lebanese (I think?) man who went on to become one of the execs at Mobil or some other oil company, and his mother was still disappointed that he didn't own his own company.
Europe is obviously full of sole proprietor tradesmen, shop and restaurant owners etc. It's completely orthogonal to the apparent shortage of VC-funded startup unicorn hustle culture.
I am thoroughly perplexed by this statement. Every single person who starts their own restaurant, painting company, events planning company, etc. is an entrepreneur. The appeal of saving up enough to break free of your job and start working for yourself is so pervasive as to be almost entirely unspoken. It’s something that, being raised as an American, you simply believe is good in the same way you believe that stealing is bad.
And yet I can’t name a single entrepreneur that I know personally outside of tech.
There's this sentiment in Germany that if you can't make in industry, you work for the government or - even worse - become a politician. It seems like Mistral took that to the next level; they can't compete so they do lobbying instead.
Being European, I love the idea of European AI labs. But I wish there was more competition.
That being said, as a German for example, I can't think of an AI company successfully training a competitive foundation model here. The copyright mafia would take your investor's money before you could even finish the first training run (hyperbole.)
Is really a compete XOR lobby the government? The AI companies in the US do both, and nobody says "OpenAI can't compete so they do lobbying" or "Anthropoic can't compete so they do lobbying".
I like the sentiment. Keeps a lot of people out of politics so the few can rob everyone else blind. No no, you don’t want this job it’s for loser hacks only.
In that case, hopefully the copyright mafia will take the money from US and Chinese LLM companies and redistribute it to the people who did the actual work fueling the models, such as myself.
I did not spend 10 years writing (A)GPL code for all of it to be stripped of its license, remixed and sold for profit.
Of course in a truly just world, the LLM companies who took my code without permission would beg with offers of owning a share of them because if I didn't consent their models would have to be destroyed.
Since my work is apparently so valuable that they just have to have it, it should count towards my retirement age too.
But it begs the question why you chose (A)GPL instead of a permissive license in the first place. If you are OK with people training and using LLMs on top of your work not giving users the right to inspect and modify, you must have logically been OK with it before. The existence of LLMs or even AI is irrelevant to your position.
If you think the belief that people should be rewarded pro productive and useful work is narcissism, then you need to either learn about work or narcissism.
I like the "european technology" movement not because of any nationalist ideas, but because it stimulates technological innovation and creates a new dynamic.
It's important to note that these efforts aren't nationalistic - they're multilateral. In fact, European nationalists are consistently trying to sabotage European efforts.
On the bright side: people seem to be moving away from such nationalistic ideas. Here's to Orban being the first of many defeats for them in the near future.
I've tried Mistral a few times, at first it seemed promising (though lagging) but at some point it seems like they stopped focusing on AI and shifted their focus to being a mouthpiece for EU policy and pushing for regulation. I can't really take any of their announcements seriously anymore.
A couple of weeks ago they were calling for a European AI tax to pay creatives.
Recordable CDs involved individuals making copies. AI is run by a couple of dozen people who give full access to other people's work, metered by the syllable.
It was never legal for massive corporations to record other people's work on CDs and sell them; that's the opposite of copyright. The comparison is absurd.
I lived and studied in France. So it's only natural for me to try out Mistral's every major updates. I had the same sentiment with you, that their models were just a bit lagging. But on the other hand, I understand their shift. Their value is not in SOTA coding, math, or puzzle solving performance in my opinion. They will catch up. To me it makes sense that they focus on something else, how to scale through talents and propagate their models with policies in Europe.
I used to use Mistral OCR, but found it was better just to write a program that sent the documents to Claude Sonnet to OCR instead. Claude is far better quality, better formatting and fewer errors.
I'm also using Voxtral TTS to try to replace OpenAI. It "works", but I've had problems with volume levels being radically different between different audio chunks. It doesn't seem to "understand the full text" the way OpenAI's voice models do, which can be more expressive. Voxtral sometimes sounds robotic in the reading. And some Voxtral TTS output contains music in the background occasionally, which suggests their training corpus isn't that clean. Try generating a personalized news podcast, and the intro may occasionally sound like the music for BBC News underneath....
As for not focusing on AI, there's this interview in the Big Technology Podcast 2 months ago, where the Mistral CEO says their main focus is on helping companies fine-train models for internal use, over being a general model builder.
"I sent money to the god knows how many trillion parameters fully closed source machine built on billions of dollars and it worked better than the model that I can self host from the guys next door"
yeah, no shit ? All you're saying is that you're happily locking yourself in to models you have zero control over and that Anthropic can fuck you over at any time.
However, yes, Mistral is not in the business of providing you with a perfect, general purpose model. They fine tune from their base models for specific tasks.
Mistral OCR 3 isn't open weights and isn't available for download. It's only available via API, or to companies via paid consulting with Mistral.
"For organizations with stringent data privacy requirements, Mistral OCR offers a self-hosting option. This ensures that sensitive or classified information remains secure within your own infrastructure, providing compliance with regulatory and security standards. If you would like to explore self-deployment with us, please let us know."
I used their OCR against a few hundred page PDF that was printed text but missing the OCR. It cost me $5 and was useless, it did worse than tesseract. That's how all my experience with mistral is
Sehr gut! I need to show it to my colleagues. Unfortunately half of them are on vacation currently and another half on sick leave. We decided to make a Teams call in August to discuss how to proceed with this.
58 Minute reading time. I read the first dozen pages or so and I'm not sure what the goal of this thing is, why they wrote it, who they wrote it for? Is it aimed at European governments? Or companies? Or people? Or something else?
> This playbook provides a clear, actionable framework to position Europe as that powerhouse, accelerating AI development and adoption, attracting and retaining top talent, simplifying regulation without sacrificing values, and mobilizing public and private investment to build homegrown AI infrastructure. Only with it, Europe can ensure AI is not only developed in Europe, but for Europe and on Europe’s terms.
playbook for what?
> This document is not a theoretical exercise. It is a practical playbook
Seems quite theoretical? A lot of random statistics, and all the sections start with abstract empty claims in 'not x, y' slop format "Artificial intelligence is not an abstract promise. It is a tool that fulfills its potential when embedded in the real economy."
I'd love an executive summary of this for anyone who has AI tokens to spend (I've got some other stuff to get done with what remains of my quota this week). I'm not saying this report is bad, I'm just saying it didn't do enough to convince me to read it, and it has some patterns that would make me guess it's bad.
They essentially want a bunch of stuff and most importantly funding from the EU and using the FOMO angle to get them to act. This of course is not on merit. They see that no other lab in Europe really exists and are trying to seize an open opportunity.
I hope one day soon EU politicians ask themselves why it might be that there is only one single domestic AI lab that is basically an also-ran at this point.
Reads like asking for a EU handout. It touches on some visible issues in the single market, but most of what I've seen is not warranted. Eg. minimum spending quotas for AI work/integration/research, using European models (basically today = use Mistral), or carving residency process exceptions for AI researchers.
> The question is no longer whether Europe can compete, ...
But it, too, do not ask myself this question any more.
Since EU seems to have already lost completely.
Even Proton's new local AI service uses Ollama, which was developed in USA and is pretty outclassed. Does HN say europe can do more than hope to catch up in five to ten years, if the race is still on then?
The best the EU can do is things like Proton, which is to say pretty old, mature services that all the difficult innovation has been done on in the US, and all the risk-taking done there as well on what's a good idea and what's not, reimplemented in simpler forms and sold at a reasonable price. It's like how after patents expire, generic drugs can sometimes be produced very cheaply.
The paper has plenty of things, but seems to me the gist of it is that they want to secure the public procurement cash flow in lieu of venture capital? I may be reading this wrong, but all the labels and normative proposals listed point to that.
I don't understand why European providers can't just host open-weight models developed by the Chinese, or distill Google/OpenAI/Anthropic models to produce their own models on the the cheap.
Nobody acts like you need to invent steel to have a steel mill.
There are plenty of European providers that do. That just doesn't get much publicity, as that's just part of normal business now and not part of AI startup hype cycles.
> The mechanism consists of a revenue-based levy applied to all commercial providers placing AI models on the market or putting them into service in Europe, reflecting their use of content publicly available online. This levy would apply equally to providers based abroad, creating a level playing field. The proceeds would flow into a central European fund dedicated to investing in new content creation, and supporting Europe's cultural sectors.
Presumably Mistral is putting forth the most pro-AI position possible for the region.
So it sounds like anyone doing what you described is at risk of a tax that will make their offerings uncompetitive.
what's the point? The Chinese, Google and OpenAI are burning money and we get to use the service. Having AI providers locally barely creates any jobs, it's an easily substitutable service and it has (contrary to the claims by the AI crazies) very few national security implications.
Steel is a great example because we don't pollute our rivers with steel mills any more either. As Milton Friedman said, if someone wants to give you steel and you give them green sheets of paper, be thankful, nothing's easier to make than paper.
What are you losing, the bragging rights among nerds on the internet? Right now Americans are paying the energy bills, Sam Altman is paying for the compute, they make no money off it, and they're even publishing the models! So if push comes to shove, we can deploy them. But until then how is that not a great deal
I postulate that if AI models get better, they also become more fungible. If you want to rule the world, you should make dumb software that takes time to learn. The world economy pretty much runs on MS Excel.
I don't really care about the content, but European software is also when you switch to the tab the energy consumption of your MacBook quadruples due to some inane animations.
I'm a fan of Mistral, but this seems to be 80% "make Europe more startup-friendly in general" rather than anything specific to AI.
Given how un-startup-driven adoption of new technologies usually happens in Europe, I don't see this playbook becoming a cornerstone of how AI adoption will pan out in Europe.
I’ve worked most of my career in US tech satellite offices and I have not experienced EU team members to be less productive than US team members, nor spend less time on work (if anything, more really since they also need to be available for US time zone overlap).
It’s true there are chill jobs here, as there are in the US.
But ambitious people tend to work as much as ambitious US people (and it’s really more like 40 hours work weeks - 39,5 where I live since lunch is not work time). But again, many are not really counting, it’s just a full time job.
Vacations (typically 3 weeks summer holiday and additional weeks to distribute over the year) does create longer time on skeleton crew. Skilled tech labour is also cheaper so you can just hire more to make up for it.
>Nobody at Anthropic is taking a 5 week summer break or working a 35 hour week
The people working at Mistral, Expedition 33, or other top successful software coming out of the EU, most likely also aren't working only 35 hours/week either. In fact some probably squeeze some work on weekends too out of dedication and pressure to meet deadlines.
In a lot of Austrian SW companies for example, have "all-in" contracts where you waive your rights to the scrutiny of the standard 38,5h/week in exchange for a "higher" salary with longer work hours and less time tracking. Similar cases in France I believe.
The 35h/week European meme people here parrot, you mostly see only in civil servants, old established monopolistic companies with moats and strong unions, not in scrappy start-up trying to make it and fix a bug before release, or semiconductor companies fighting a tape-out.
So no, work hours aren't what's limiting EU startups.
I feel like Europe needs to remove barriers and let people do things freely rather than stuff like "Empower AI students". Ambitious people will naturally find a way to get stuff done and you just have to allow it to happen and not get in the way. At least "EU AI talent visa" sounds like it can work by removing barriers to relocate.
I don't see the AI talent visa as a serious suggestion. There's already the Blue Card, which is pretty easy for software engineers to obtain; for an AI talent visa to be anything special, it would have to loosen the already fairly lax requirements. To manage to persuade the whole EU to create a special visa for an emerging field that doesn't even have commonly-agreed-upon qualifications would be a unrealistic feat when many EU member states are looking to close down immigration opportunities, not create them.
Other than you seeing a thing you want to see, why? There’s a pretty well known story behind that. Also, this post was written by a mensch, so have some respect.
I'd say that situation is representative of a very apropos mentality from a very apropos entity... but this reaction to even mentioning that is the most telling signal on if there's actually willpower to make what they're advocating for happen on the ground.
META used to hire in Netherlands until it stopped and left. I wondered why and a few times I heard that it was because it was hard to be dynamic in the country with the stubborn labour laws. The anecdote confirms my own bias but there seems to be not much mention on encouraging risk taking allowing dynamic entrepreneurship in this playbook, which leads me to believe this is a non issue?
> it was hard to be dynamic in the country with the stubborn labour laws
It's hard to read this as anything other than "It's hard to treat your employees like shit when countries have strong labor laws and that just won't do for american megacorps".
The glaring number to me is only 5% of VC funds vs 52% in the US. That's 10x more opportunity despite roughly comparable economies. As long as that is true, it seems like it will always be impossible to get an organic startup industry working in the EU. Any startup that is any good will almost certainly end up getting a round of investment from the US and most likely move their base of operations there.
I wonder if recent US actions will start to influence this as there now appears to be more risk in sending your money to the US or founding your company there as a foreign entity than there used to be.
Not just startups or funding. Google alone has more AI compute than China and the EU combined.
There's no shortage of capital in Europe. But nobody wants to take the risk. Meanwhile in the US, people are putting 10-100x the capital at risk. So you can say what you want about it looking scary to you to invest in the US, but the people with capital to invest clearly don't see it that way.
More often when you hear VCs give interviews, they are saying the opposite: that never-ending EU regulations introduce more business risk than anything the US president could possibly do.
I’m not all that convinced on the regulation part.
Ultimately it’s all about investing money to create real assets that generate cash flows. One can side step regulations to some extent whilst developing a product (nobody cares/notices until you are actually growing fast) and then deal with regulations later. Uber already showed this and the leading AI firms are following the same act - having ripped off a lot of content but nobody threw a fit until a legit asset came out of it.
Yes, let's ignore regulations that provide people with stable jobs, societies, and countries. Afterall what good is democracy when the alternative is making more money?
A lot of these are mostly well-meaning but have backfired. The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them.
It's counterintuitive but if you allow "failing fast", you lower risk of new engagements, and this allows for more speculative bets on ideas and people.
Make it difficult to evict tenants? Expect more stringent requirements from landlords
Enact rent control? Initial rents are going up, new builds are are disincentivized.
Strong worker protection? Expect fewer highly paid roles (wage compression)
I'm not saying these regulations are unilaterally bad - I'm saying don't be surprised that there are 2nd-order effects that are arguably just as bad, if not worse.
I would push back on a few things from what you mentioned.
> The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them.
> Strong worker protection? Expect fewer highly paid roles (wage compression)
For European startups it’s different motivation. Lower salaries than in USA are an advantage, but job security isn’t a show stopper. First team is hired in fixed contracts, which may be converted to permanent with growth. In scaling phase you add external support, with e.c. 20% of workforce coming from outstaffing, so that you can react on the market and scale down when needed. If you are big enough to be called international business, you will not hire in one of the most expensive locations in the world (USA) unless you have a good reason. There exist other easy-to-fire tech hubs, and it’s not a big problem in Europe anyway (it’s just some more effort to execute, but even with payouts it’s probably cheaper than in US).
> Make it difficult to evict tenants? Expect more stringent requirements from landlords
In Europe there’s less homeless people. It doesn’t work like that.
>Enact rent control? Initial rents are going up, new builds are disincentivized.
It’s not rent controls that make markets inefficient. They are reaction to NIMBY regulations and disincentivized home ownership like in Germany. Root cause is uncontrolled extraction of scarce resource (land) and the solution is actually to scale down for-profit rental market while aggressively subsidizing ownership and construction.
This is something you talk to people about that are in the western world but outside of the US (which includes me) but whenever I have the conversation people just can't grasp it.
The US, by having bad worker protections and privacy abusing tech companies, etc. have been able to pave the way for extreme amounts of innovation that just wouldn't happen anywhere else. The rest of the world then effectively has innovation subsidized since they import the finished product.
I also found most US startup opportunities to be practically enabled by shitty service provided by the incumbents, whether it is the state or the banks or the healthcare system.
Take Cost Plus Drugs, for instance. Or companies enabling faster cash transfers over the internet, like Paypal. Or healthcare insurance plans from Oscar Health or prescriptions from Truepill. Or videos made by Khan Academy, which are currently in use in many schools across the US.
No one is saying "ignore regulations". The US has regulations also. Every country does.
The EU has taken it to another level.
You can not regulate either of the above into existence. What good are rhetorical questions when they are nonsensical?
People like you only realise how life actually works too late in life.
Makes sense. You’re saying why would regulations matter when clearly they can just be ignored.
For venture ultimately it’s a soulless moneyman’s game. Really they have to pick winners, and anybody can look at the landscape and see there’s just not gonna be a Pierre Zuckerberg or a Klaus Kalanick. And if there ever is, he’ll need to raise lots of money anyway, which would come from venture.
> there’s just not gonna be a Pierre Zuckerberg or a Klaus Kalanick
Which is very much a positive. Those two aren’t a boon to humanity, they very much made everything worse at a global scale. We need fewer people emulating them, not more.
I don’t consider VC investments to be particularly beneficial to the world. This idea of “let’s use capital to make it faster for people to exploit others with the only goal of generating more capital” does more harm than good.
That's why Mistral is not focused on raising venture capital. Instead, they prioritize securing government contracts; hence their significant political lobbying efforts.
The funding allocation is a reflection of different cultures really.
I’m from the UK but there’s no way there’s the same density, drive, and hunger to take risk, to the extent that you find in US. Also there’s a lot more synergy in the US vs a fragmented Europe.
I’m also from the UK and I think this is a self-fulfilling prophecy.
As a UK founder that has raised in the UK, I have seen our US competitors raise substantially more with substantially less traction, so in future I’m significantly more tempted to look across the pond for raising. It has little to do with my culture vs theirs, and all to do with where the opportunity sits.
Many of the other founders I know with the “drive and hunger” as you put it, have already made the same jump.
> It has little to do with my culture vs theirs, and all to do with where the opportunity sits.
So it does have to do with culture. The US has better culture for starting a business. You can't just divorce the opportunity that came from the culture just to make a point.
there's probably a high correlation between people with the "drive and hunger" to build a startup in the first place with those that would have the "drive and hunger" to relocate overseas to make it successful.
Yet the UK did produce Deepmind. Which you can look at both ways since it got gobbled up by Google. But it at least came from the UK.
I assume the article excludes the UK, I feel like UK has much more of a startup and VC scene than Europe does and I wonder if that is part of the issue : if you do want to create a startup, the London is a better place than mainland Europe. So even startups that for whatever reason won't take US funding still land outside Europe.
> Yet the UK did produce Deepmind
That was a long time ago. That UK is not the UK of today.
There are places with the same entrepreneurial drive that are part of the EU. But look at an LP-facing deck for a VC fund in Europe, and I can't recall ever seeing an investment with a little flag of Poland.
My belief is the underlying dynamics are less about, generalizing about cultures. Like you're right that that's what US VCs say, and collective belief is truth in markets even if it is not truth in reality. The bigger factor is EU, meaning French, Dutch, German, Swiss and Italian capital, are concentrated into the hands of large, opaque family trusts, structured primarily around tax evasion first and foremost, and other feudal issues, rather than minimizing the downsides of real risk or whatever, and that feudal stuff means, why do early stage investing? Without that there's little innovation. Hence Mistral, a growth stage company that everyone is happy making the growth stage, "dot AI" and "dot EU" winner. Presumably for EU sovereign wealth to be forced to buy.
This assumes one would want a startup industry. It's a bit like wishing your country had more private equity.
Imagine all the great investments the US VCs are missing outside of AI.
I lead a European owned and operated Data/AI company, Hopsworks. We are the only competitor to Databricks/Snowflake/etc based-in and from Europe. We can still compete, as we have a deep research/industry background (ex-MySQL and KTH folks). Crossing the chasm is harder from here. Even if you build a great product (we are best at real-time AI) - we had a paper at SIGMOD 2024 where we showed higher thoughput/lower latency by a factor of 4-40X Databricks, AWS Sagemaker, and GCP vertex - we lack the echo chamber. (Try the mental exercise where Databricks' peers acknowledge massive over-performance through a peer-reviewed paper and imagine how much noise it would generate). Still, we can replace our competitor at their largest European customer, Zalando, for real-time AI. But it's a much harder slog than it should be due to the 10X lower round sizes (due to 10X smaller VC fund sizes). European pension funds place way more money in US VC funds than in EU VC funds - that is self-defeating.
There cannot be echo chamber as long as entrepreneurship is not seen as generally acceptable in European culture
I hate that I agree, and yet, I agree. The EU has a giant single market, has a pipeline of elite tech talent from everywhere from Finland in the North on down, has long since settled on English as the lingua franca of business but has plenty of tools to solve i18n, and yet...culturally is just hostile to entrepreneurship in a way that goes beyond reasonable suspicion of fakery. what's that all about?
I don't think it's regulation, btw. Starting and running my company in the UK pre Brexit was way easier than doing it in the US. Keeping the IRS happy is no joke.
Brain drain I expect. All the people who believed in freedom and entrepreneurship have had maybe a century of incentives to leave Europe and head for the US.
Society seems to rely on a tiny pool of overly-motivated people to do most of the work. There has historically been a healthy pipeline and many good reasons to convince them to leave Europe. And apparently sufficient safeguards to stop them building too much if they stay, based on the lack of success the EU has had in tech.
Looking at the US culture, it's not hard to see entrepreneurship as a societal disease.
Let's not act like "entrepreneurship" is necessary at all to develop technology. Western governments simply have no ability to find their own destination as any attempt to get off the US big tech ramp comes with threats to destroy defense treaties, weapons contracts, and tariffs with their major ally.
Hardly anything to do with "entrepreneurship" and more about the insidious nature of US imperialism and how damaging neoliberalism is to the world.
Good on Europeans for rejecting this American blight.
>Good on Europeans for rejecting this American blight.
Reject it? They pay hundreds of billions for it. Every year. For decades now.
Europe runs on American tech, using American and Chinese hardware, powered by American energy, and protected by American defense.
Surely you're confused here, because Europe didn't reject these things, they offshored them and then teased Americans about working so hard. Europe's economic situation right now is borderline catastrophic, mostly because they built a society on someone else's support in the uncannily calm times after the wall fell.
> Looking at the US culture, it's not hard to see entrepreneurship as a societal disease.
It's easy if you're in some nihilistic and cynical echochamber like reddit. For everybody else, entrepreneurship is still quite celebrated and seen as a positive for society.
Really? Who do you know who isn't working in tech and finds something to celebrate in entrepreneurship?
In Australia one of the most common paths to wealth outside of owning property is literally taking up a trade as an apprentice, then after a couple of years beginning your own plumbing/electrician/brick laying/etc business.
That's still very highly celebrated. Interestingly enough, people with Mediterranean backgrounds also feel this way (there's lots of crossover here btw).
Owning your own business is one of the best things one can do in that culture. There's a story in a Taleb book about a Lebanese (I think?) man who went on to become one of the execs at Mobil or some other oil company, and his mother was still disappointed that he didn't own his own company.
Europe is obviously full of sole proprietor tradesmen, shop and restaurant owners etc. It's completely orthogonal to the apparent shortage of VC-funded startup unicorn hustle culture.
I am thoroughly perplexed by this statement. Every single person who starts their own restaurant, painting company, events planning company, etc. is an entrepreneur. The appeal of saving up enough to break free of your job and start working for yourself is so pervasive as to be almost entirely unspoken. It’s something that, being raised as an American, you simply believe is good in the same way you believe that stealing is bad.
And yet I can’t name a single entrepreneur that I know personally outside of tech.
Well said Comrade.
Entrepreneurship is the fountain of wealth. What else are you going to do, extract natural resources?
There's this sentiment in Germany that if you can't make in industry, you work for the government or - even worse - become a politician. It seems like Mistral took that to the next level; they can't compete so they do lobbying instead.
Being European, I love the idea of European AI labs. But I wish there was more competition.
That being said, as a German for example, I can't think of an AI company successfully training a competitive foundation model here. The copyright mafia would take your investor's money before you could even finish the first training run (hyperbole.)
Is really a compete XOR lobby the government? The AI companies in the US do both, and nobody says "OpenAI can't compete so they do lobbying" or "Anthropoic can't compete so they do lobbying".
Nobody can compete with trillions of dollars of capital if it’s a race for capital.
I'm not sure about that. Post GFC the ECB printed plenty of cash as well.
https://fred.stlouisfed.org/series/ECBASSETSW
I like the sentiment. Keeps a lot of people out of politics so the few can rob everyone else blind. No no, you don’t want this job it’s for loser hacks only.
they already pivoted to be the EUROPE ai cloud, this is just the natural consequences of cheerleading that
In that case, hopefully the copyright mafia will take the money from US and Chinese LLM companies and redistribute it to the people who did the actual work fueling the models, such as myself.
I did not spend 10 years writing (A)GPL code for all of it to be stripped of its license, remixed and sold for profit.
Of course in a truly just world, the LLM companies who took my code without permission would beg with offers of owning a share of them because if I didn't consent their models would have to be destroyed.
Since my work is apparently so valuable that they just have to have it, it should count towards my retirement age too.
I have written a bunch of (A)GPL code too and I'm 100% supportive of AI learning from it.
Great, you have that right.
But it begs the question why you chose (A)GPL instead of a permissive license in the first place. If you are OK with people training and using LLMs on top of your work not giving users the right to inspect and modify, you must have logically been OK with it before. The existence of LLMs or even AI is irrelevant to your position.
Can you prove your work was used in any of these models? And if so what percentage of your work constitutes the model?
> LLM companies and redistribute it to the people who did the actual work fueling the models, such as myself.
Okay this is a new level of narcissism and gatekeeping, thanks for the laugh.
If you think the belief that people should be rewarded pro productive and useful work is narcissism, then you need to either learn about work or narcissism.
I like the "european technology" movement not because of any nationalist ideas, but because it stimulates technological innovation and creates a new dynamic.
It's important to note that these efforts aren't nationalistic - they're multilateral. In fact, European nationalists are consistently trying to sabotage European efforts.
On the bright side: people seem to be moving away from such nationalistic ideas. Here's to Orban being the first of many defeats for them in the near future.
"European nationalists" as in "nationalists which happen to reside in Europe", not "Chauvinistic European federalists", which feels like a rare breed.
I've tried Mistral a few times, at first it seemed promising (though lagging) but at some point it seems like they stopped focusing on AI and shifted their focus to being a mouthpiece for EU policy and pushing for regulation. I can't really take any of their announcements seriously anymore.
A couple of weeks ago they were calling for a European AI tax to pay creatives.
Sounds like the tax on recordable CDs.
https://en.wikipedia.org/wiki/Private_copying_levy
Ridiculous, and it didn't take money from the right people or give it to the right people. I would expect the same from an AI tax.
Recordable CDs involved individuals making copies. AI is run by a couple of dozen people who give full access to other people's work, metered by the syllable.
It was never legal for massive corporations to record other people's work on CDs and sell them; that's the opposite of copyright. The comparison is absurd.
I lived and studied in France. So it's only natural for me to try out Mistral's every major updates. I had the same sentiment with you, that their models were just a bit lagging. But on the other hand, I understand their shift. Their value is not in SOTA coding, math, or puzzle solving performance in my opinion. They will catch up. To me it makes sense that they focus on something else, how to scale through talents and propagate their models with policies in Europe.
They are making some very good specialised models, like Voxtral
Why do you say they "stopped focusing on AI"? I see a pretty consistent release of pretty good products - particularly in speech and OCR.
I used to use Mistral OCR, but found it was better just to write a program that sent the documents to Claude Sonnet to OCR instead. Claude is far better quality, better formatting and fewer errors.
I'm also using Voxtral TTS to try to replace OpenAI. It "works", but I've had problems with volume levels being radically different between different audio chunks. It doesn't seem to "understand the full text" the way OpenAI's voice models do, which can be more expressive. Voxtral sometimes sounds robotic in the reading. And some Voxtral TTS output contains music in the background occasionally, which suggests their training corpus isn't that clean. Try generating a personalized news podcast, and the intro may occasionally sound like the music for BBC News underneath....
As for not focusing on AI, there's this interview in the Big Technology Podcast 2 months ago, where the Mistral CEO says their main focus is on helping companies fine-train models for internal use, over being a general model builder.
https://www.youtube.com/watch?v=xxUTdyEDpbU&t=1357s
"I sent money to the god knows how many trillion parameters fully closed source machine built on billions of dollars and it worked better than the model that I can self host from the guys next door"
yeah, no shit ? All you're saying is that you're happily locking yourself in to models you have zero control over and that Anthropic can fuck you over at any time.
However, yes, Mistral is not in the business of providing you with a perfect, general purpose model. They fine tune from their base models for specific tasks.
Mistral OCR 3 isn't open weights and isn't available for download. It's only available via API, or to companies via paid consulting with Mistral.
"For organizations with stringent data privacy requirements, Mistral OCR offers a self-hosting option. This ensures that sensitive or classified information remains secure within your own infrastructure, providing compliance with regulatory and security standards. If you would like to explore self-deployment with us, please let us know."
https://docs.mistral.ai/models/ocr-3-25-12 https://mistral.ai/news/mistral-ocr-3
I used their OCR against a few hundred page PDF that was printed text but missing the OCR. It cost me $5 and was useless, it did worse than tesseract. That's how all my experience with mistral is
“European AI tax to pay creatives”
Love that idea.
I mean we already pay a tax when buying phones or storage because it's assumed we'll use it for piracy so why not.
If they want to improve but find that European regulations are the main obstacle, it makes sense they focus on that.
Maybe I wasn't very clear. It seems like they are in support of those regulations. They seem like an EU mouthpiece
Sehr gut! I need to show it to my colleagues. Unfortunately half of them are on vacation currently and another half on sick leave. We decided to make a Teams call in August to discuss how to proceed with this.
Cynical. Start by allowing remote positions in Mistral across Europe.
That is an excellent point. They have shown zero interest in doing that so far.
58 Minute reading time. I read the first dozen pages or so and I'm not sure what the goal of this thing is, why they wrote it, who they wrote it for? Is it aimed at European governments? Or companies? Or people? Or something else?
> This playbook provides a clear, actionable framework to position Europe as that powerhouse, accelerating AI development and adoption, attracting and retaining top talent, simplifying regulation without sacrificing values, and mobilizing public and private investment to build homegrown AI infrastructure. Only with it, Europe can ensure AI is not only developed in Europe, but for Europe and on Europe’s terms.
playbook for what?
> This document is not a theoretical exercise. It is a practical playbook
Seems quite theoretical? A lot of random statistics, and all the sections start with abstract empty claims in 'not x, y' slop format "Artificial intelligence is not an abstract promise. It is a tool that fulfills its potential when embedded in the real economy."
I'd love an executive summary of this for anyone who has AI tokens to spend (I've got some other stuff to get done with what remains of my quota this week). I'm not saying this report is bad, I'm just saying it didn't do enough to convince me to read it, and it has some patterns that would make me guess it's bad.
Indeed very slop-feeling "whitepaper", might as well be written by chatgpt/claude because it has the tropes.
Multiple sections have expandable subsections for more details on proposals.
It’s a load of nonsense.
They essentially want a bunch of stuff and most importantly funding from the EU and using the FOMO angle to get them to act. This of course is not on merit. They see that no other lab in Europe really exists and are trying to seize an open opportunity.
I hope one day soon EU politicians ask themselves why it might be that there is only one single domestic AI lab that is basically an also-ran at this point.
Reads like asking for a EU handout. It touches on some visible issues in the single market, but most of what I've seen is not warranted. Eg. minimum spending quotas for AI work/integration/research, using European models (basically today = use Mistral), or carving residency process exceptions for AI researchers.
The site starts with
> The question is no longer whether Europe can compete, ...
But it, too, do not ask myself this question any more. Since EU seems to have already lost completely.
Even Proton's new local AI service uses Ollama, which was developed in USA and is pretty outclassed. Does HN say europe can do more than hope to catch up in five to ten years, if the race is still on then?
The best the EU can do is things like Proton, which is to say pretty old, mature services that all the difficult innovation has been done on in the US, and all the risk-taking done there as well on what's a good idea and what's not, reimplemented in simpler forms and sold at a reasonable price. It's like how after patents expire, generic drugs can sometimes be produced very cheaply.
> The question is no longer whether Europe can compete
What a nice tagline lol. You really can read it both ways.
The paper has plenty of things, but seems to me the gist of it is that they want to secure the public procurement cash flow in lieu of venture capital? I may be reading this wrong, but all the labels and normative proposals listed point to that.
I don't understand why European providers can't just host open-weight models developed by the Chinese, or distill Google/OpenAI/Anthropic models to produce their own models on the the cheap.
Nobody acts like you need to invent steel to have a steel mill.
There are plenty of European providers that do. That just doesn't get much publicity, as that's just part of normal business now and not part of AI startup hype cycles.
So they don't have to worry about getting shut out if the Chinese stop open sourcing.
I don’t know either, but playbook item #20 has:
> The mechanism consists of a revenue-based levy applied to all commercial providers placing AI models on the market or putting them into service in Europe, reflecting their use of content publicly available online. This levy would apply equally to providers based abroad, creating a level playing field. The proceeds would flow into a central European fund dedicated to investing in new content creation, and supporting Europe's cultural sectors.
Presumably Mistral is putting forth the most pro-AI position possible for the region.
So it sounds like anyone doing what you described is at risk of a tax that will make their offerings uncompetitive.
So why even bother?
what's the point? The Chinese, Google and OpenAI are burning money and we get to use the service. Having AI providers locally barely creates any jobs, it's an easily substitutable service and it has (contrary to the claims by the AI crazies) very few national security implications.
Steel is a great example because we don't pollute our rivers with steel mills any more either. As Milton Friedman said, if someone wants to give you steel and you give them green sheets of paper, be thankful, nothing's easier to make than paper.
What are you losing, the bragging rights among nerds on the internet? Right now Americans are paying the energy bills, Sam Altman is paying for the compute, they make no money off it, and they're even publishing the models! So if push comes to shove, we can deploy them. But until then how is that not a great deal
I postulate that if AI models get better, they also become more fungible. If you want to rule the world, you should make dumb software that takes time to learn. The world economy pretty much runs on MS Excel.
I don't really care about the content, but European software is also when you switch to the tab the energy consumption of your MacBook quadruples due to some inane animations.
I'm a fan of Mistral, but this seems to be 80% "make Europe more startup-friendly in general" rather than anything specific to AI.
Given how un-startup-driven adoption of new technologies usually happens in Europe, I don't see this playbook becoming a cornerstone of how AI adoption will pan out in Europe.
We also need to talk about work schedules. Nobody at Anthropic is taking a 5 week summer break or working a 35 hour week.
Europe can be a top player in AI —- but there is a cost.
There is but I don’t think this is it.
I’ve worked most of my career in US tech satellite offices and I have not experienced EU team members to be less productive than US team members, nor spend less time on work (if anything, more really since they also need to be available for US time zone overlap).
It’s true there are chill jobs here, as there are in the US.
But ambitious people tend to work as much as ambitious US people (and it’s really more like 40 hours work weeks - 39,5 where I live since lunch is not work time). But again, many are not really counting, it’s just a full time job.
Vacations (typically 3 weeks summer holiday and additional weeks to distribute over the year) does create longer time on skeleton crew. Skilled tech labour is also cheaper so you can just hire more to make up for it.
Maybe they should.
Taking a break and looking at the direction AI is advancing won't hurt.
They'd have to convince the Chinese to do the same.
>Nobody at Anthropic is taking a 5 week summer break or working a 35 hour week
The people working at Mistral, Expedition 33, or other top successful software coming out of the EU, most likely also aren't working only 35 hours/week either. In fact some probably squeeze some work on weekends too out of dedication and pressure to meet deadlines.
In a lot of Austrian SW companies for example, have "all-in" contracts where you waive your rights to the scrutiny of the standard 38,5h/week in exchange for a "higher" salary with longer work hours and less time tracking. Similar cases in France I believe.
The 35h/week European meme people here parrot, you mostly see only in civil servants, old established monopolistic companies with moats and strong unions, not in scrappy start-up trying to make it and fix a bug before release, or semiconductor companies fighting a tape-out.
So no, work hours aren't what's limiting EU startups.
I feel like Europe needs to remove barriers and let people do things freely rather than stuff like "Empower AI students". Ambitious people will naturally find a way to get stuff done and you just have to allow it to happen and not get in the way. At least "EU AI talent visa" sounds like it can work by removing barriers to relocate.
I don't see the AI talent visa as a serious suggestion. There's already the Blue Card, which is pretty easy for software engineers to obtain; for an AI talent visa to be anything special, it would have to loosen the already fairly lax requirements. To manage to persuade the whole EU to create a special visa for an emerging field that doesn't even have commonly-agreed-upon qualifications would be a unrealistic feat when many EU member states are looking to close down immigration opportunities, not create them.
Mistral is the only AI bot I haven’t blocked from my server.
Do they respect robots.txt?
How?
Interesting reading this with
> Tell HN: docker pull fails in spain due to football cloudflare block
next to it on the front page
Other than you seeing a thing you want to see, why? There’s a pretty well known story behind that. Also, this post was written by a mensch, so have some respect.
I'd say that situation is representative of a very apropos mentality from a very apropos entity... but this reaction to even mentioning that is the most telling signal on if there's actually willpower to make what they're advocating for happen on the ground.
META used to hire in Netherlands until it stopped and left. I wondered why and a few times I heard that it was because it was hard to be dynamic in the country with the stubborn labour laws. The anecdote confirms my own bias but there seems to be not much mention on encouraging risk taking allowing dynamic entrepreneurship in this playbook, which leads me to believe this is a non issue?
But messagebird is another example.
> it was hard to be dynamic in the country with the stubborn labour laws
It's hard to read this as anything other than "It's hard to treat your employees like shit when countries have strong labor laws and that just won't do for american megacorps".
I find it so funny that the people leading AI today have names that could be the characters of a bad scifi novel.
Amodei (love of god) Altman (alternative to man?) Arthur Mensch fighting from the ethical side
this whole timeline feels like a Bad Cyberpunk novel, Trump, Musk etc