French AI startups journey westward

While there have been many success stories, some French transplants in the Bay Area believe that EU regulations, such as the EU AI Act, could make it harder for French businesses to achieve international success and recognition.

“Regulations can create niche markets, which might not appeal to companies looking to become a global leader,” says Stamirowska. “However, there are more opportunities to find niches within certain regions, although some may be harder to penetrate than others. On the other hand, the impact of regulation on technical progress and R&D needs to be considered as local companies may find themselves playing catch-up as opposed to leading the innovation race. Ultimately, it depends on the company’s goals.”

Lago, a startup presenting itself as an open-source alternative to Stripe, was founded in Paris. However, Anh-Tho Chuong, its cofounder and CEO, moved the headquarters to San Francisco last year. It’s not her first time in the US—she has family roots here, and participated in the famous Y Combinator, a startup incubator with alumni that include the founders of Airbnb, Twitch, Coinbase and Stripe.

“If you want a successful software company, unfortunately, it doesn’t happen in France,” Chuong says. “We’re open source, and there are few success stories, few resources. It was a strategic choice for us to have our leads in the US.”

And, as many French people know, finding success in the US is sometimes the surest way to finding success elsewhere in the world, including back home in France. “We have US-based companies as clients, recognized both in the US and Europe, which radiates across both regions,” Chuong says. “Unfortunately, if we had had the equivalent in Europe, it wouldn’t have had the same impact.”

France’s AI startups have garnered a lot of attention since 2017, when a newly elected President Emmanuel Macron announced his ambition to turn his country into Europe’s “startup nation.” “A ‘startup nation’ is a nation where everyone can say to themselves that they will be able to create a startup,” he famously said. “I want France to be one.”

In the first months of his presidency, he inaugurated Station F, a Paris-based incubator that would become the leading organization of its kind in France. Since its launch, Station F has worked with more than 7,000 startups, has raised more than 1 billion euros, and has mentored companies that were acquired by giants like Samsung, Apple and SAP.

Eight years later, as the AI race heats up more than ever, it will remain to be seen if his ambitions turn into reality.