Welcome to French Tech Updates! Your weekly source of startup, VC, and tech news and insights. I’m James, a startup-obsessed American living in Paris.

Who will create the most valuable AI company in history? 🔜🤖

This past week has been heavily focused on AI (even more so than usual) thanks in large part the AI Action Summit bringing thousands of entrepreneurs, investors, and world leaders to Paris to discuss the future of the most hyped technology in the world.

When it comes to hype, the crème-de-la-crème is the hype around DeepSeek and their market-cap killing application which temporarily claimed the #1 spot in the iPhone app store. “Temporarily” may be the key word there since the hype aura around DeepSeek seems to already be fading.

Regardless of whether DeepSeek specifically continues to obliterate NVIDIA’s stock price, the wild swings of the last few weeks did make me wonder if we’re starting a transition to the next phase of the AI wave.

Looking back to the early days of the internet, there are some similarities between these two mega trends. Both relied on foundational hardware (networking for the internet and advanced chips for AI) and both have seen popular applications built on top of crucial infrastructure layers.

What I find interesting is that the early winners of the internet boom were rarely the biggest success stories in the long run. Take Intel and Cisco for example, both of which saw their market capitalizations soar to over $500 billion in 2000 only to fall sharply and take another 20 years to regain even half of that peak valuation.

Other companies who arrived later in the internet value chain, like Microsoft, Amazon, and Apple, went on to achieve valuations in the trillions of dollars—higher even than the overinflated valuations of the success stories that came before them.

While past performance is not a guarantee of future results, it certainly is possible that a similar pattern will play out with artificial intelligence. If that’s true, we may be seeing the beginning of a shift in gravity from AI hardware to AI applications—with even more eye-popping returns ahead for the winners.

Presently, NVIDIA is the 2nd most valuable company in the world with a market cap over $3 trillion. If, like with the internet, the ultimate value from AI will be created further down the value chain then we may see the AI giants of the future reaching valuations approaching $10 trillion—over 2X the size of France’s entire GDP.

What I find most exciting is that we don’t even know what form these value creators will take. Right now, there’s a lot of talk about AI agents, but also about robotics and physical applications of AI. Wherever these future winners show up, it’s very likely that some of them are being created right now as you read this.

Equally possible is a scenario where the AI giants of today stay nimble enough to evolve with the changes, as did companies like Microsoft and Apple, and continue their rapid growth trajectory. Either way, the second half of the 2020s is going to be a very interesting period in history.

With that, let’s jump into this week’s update!

📝 Quiz: Where does France rank globally in terms of # of AI researchers?

(answer at the bottom of the newsletter)

• A.) #1

• B.) #2

• C.) #3

• D.) #4

What’s new this week in 🇫🇷

• 🤖 AI Action Summit wraps up in Paris: The event saw plenty of news—including €300 billion in funding for AI in Europe, Mistral seemingly partnering with everyone, and some snarky remarks from the US VP. Click the link for the full recap.

• 🏦 BNP Paribas and BPCE team up to create Estreem, a new payments processing join venture: The resulting project between France’s 1st and 4th largest banks will handle an estimated 17 billion transactions per year.

• ⚔️ Mistral courts defense contracts across Europe: A newly announced partnership between the French AI darling and German defense tech Helsing during last week’s AI Action Summit is apparently just the beginning of a planned expansion into defense partnerships for Mistral.

🌍 Headlines from around the world

• 🏭 Arm to start manufacturing their own chips with Meta as their first customer (Yahoo!)

• ✂️ Tech layoffs quietly continued in January (TechCrunch)

• 💰 Meta, Amazon, Microsoft, and Alphabet plan to invest €320 into AI this year (CNBC)

• 💵 Thomson Reuters created $150M corporate venture fund (Thomson Reuters)

• 🦾 Meta is on a hardware spree with plans to develop humanoid robots and build a world-wide subsea fiberoptic cable (TechCrunch)

• 🙅‍♂️ Open AI rejects an unsolicited takeover offer of $97.4 billion put together by Elon Musk and a group of investors (WSJ)

• 👨‍⚖️ Uber sues DoorDash over “anti-competitive practices” (Business Insider)

New Funding 💶

13 companies raised €76.4M in the last week including €1M by Toum AI (voice analytics), €1M by ENERSENS (aerogel), €1M by ExtraJool (Clean Tech), and €600K by Naali (Wellness).

Upcoming Events 🗓

• Community Apero at Climate House – February 26

• AWS Startup Day | Early Stage Edition 2025 – March 4

• Demo Day | CCI Paris x SeedLegals – March 6

• InnoConnect Startup Pitch Deadline – March 6

Interesting Jobs 👩‍💻

• 🏦 Senior Product Manager @ Pennylane

• 📇 Brand & Content Lead @ Tomorro

• 💳 Business Developer - Mid Market (Swile Travel ✈️) @ Swile

• 🫲 Right Hand to the CEO @ NomadHer

• 🫡 CMO @ Kolsquare

• 🎨 Senior Product Designer @ Contentsquare

• 🛠️ Engineering Program Manger @ Pigment

• 👷 Senior Product Manager @ Proton

• 🫡 CMO @ Lucca

• 📈 Head of Growth @ SchoolMaker

• 👷 Senior Product Manager (AI focused) @ Pigment

What Else I’m Reading 📚

• The most important thing AI has ever done (Veritasium)

• The inside story of how Sam Altman and Elon Musk went from friends to bitter enemies (WSJ)

• Exposing YouTube’s secrets by scraping its data (BBC Future)

• AI Agents aren’t ready for primetime, but they’re being released anyway (Vox)

• Why AI could eat quantum computing’s lunch (MIT Technology Review) – it’s paywalled, so the tl;dr is advanced in AI simulations for physics, chemistry, materials science, etc. are improving, leading some researchers to question whether quantum computers will ever be necessary for many of their most promising applications.

• Europe can build anything, if we want to (Pia Michel)

Newsletter Recommendations 🫶

Quiz Answer: C.) #3

With more than 4,000 AI researchers according to a report issued by the Élysée, France ranks #3 globally.