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.

A tale of two futures 🔮

The last few weeks have seen whiplash action in public markets as investors scrambled to answer an important question: “is all this AI investment actually doing anything useful?” Similar to grief, it appears euphoria also has 5 stages and we are now passing from the pure bliss stage to the return of critical thinking.

While the outcome is far from clear, the AI skeptics do raise some questions worth exploring—notably when it comes to spending. I’ve written before about the expansion in big tech CapEx as the world’s largest companies compete for AI dominance. Whether the projected $500 billion in projected investment from Alphabet, Meta, Amazon, and Microsoft is justified really comes down to which of two camps you fall into:

• 🅰️⛺️ The (re)invention of fire: AI is a world-changing technology unlike anything else we have ever seen and will completely reshape every aspect of our lives. It’s the re-invention of fire that will propel humanity into a new chapter in our history.

• 🅱️⛺️ The combustion engine: AI is a lot more like other disruptive technologies we have seen before. It will reshape the labor market, increase productivity, and have a profound impact on our world…but it still can’t hold a candle to the invention of fire.

If camp A is correct then almost any amount of investment into AI is justified. If you had a chance to invest your life savings into the commercialization of fire way way back in 2,000,000 BCE wouldn’t you do it? The FOMO around fumbling this kind of opportunity is almost unimaginable. Missing out on a development of this magnitude would make the infamous $800 sale for a 10% stake in Apple look like nothing in comparison.

On the other hand, if camp B is correct it’s still beneficial to invest in AI as a new technology, but knowing where the line falls between the right amount of investment and too much is crucial. The ROI on investing your life savings into the invention of the shovel is a lot different than investing in fire.

There’s also an option C where both camps can be correct, but at different times. AI could be a disruptive improvement in the short-term and a world-altering force a few years or decades later. In that case, knowing where we are on that timeline is essential for guiding investment decisions. In this scenario, the usefulness of our current AI is a helpful indication of our position on the timeline.

France is home to several of the best-funded AI startups in the world, all of which have benefited from increased investment into the sector. Even more importantly, in response the question “is all this AI investment actually doing anything useful?” many of them can answer “oui, bien sûr.”

From Nabla, which saves doctors up to 2 hours per day with AI generated patient notes, to Dust, whose custom AI assistants trained on proprietary data I personally use every week, French AI tech is generating more than text and images. It’s generating useful outcomes, which are the first step in determining what a future influenced by AI will look like.

And with that, let’s jump into this week’s update!

📝 Quiz: What does each line on this graph represent?

(answer at the bottom of the newsletter)

• A.) Blue = France. Red = US. Yellow = Europe.

• B.) Blue = UK. Red = Germany. Yellow = France.

• C.) Blue = Europe. Red = US. Yellow = France.

• D.) Blue = France. Red = Europe. Yellow = US.

What’s new this week in 🇫🇷

• 🌱 Station F doubles down on climate tech with 2 new programs: Last week, the world’s largest startup campus debuted a new partnership with climate-focused incubator Marble and a new Climate 10 Fellowship to support young, climate tech companies with aims to “slash emissions, remove carbon, and cool the planet.”

• 🇫🇷 France has a Prime Minister again: Former chief EU Brexit negotiator Michel Barnier was announced as the new Prime Minister last week. Although Barnier is over twice the age of previous PM Gabriel Attal, he is not without strong opinions on new technology and startups. Barnier is an advocate for European digital sovereignty, including the construction of more digital infrastructure in Europe, of increasing regulation of big tech platforms like Meta and Alphabet, and of personal data protection. It may be awhile though before we see the full impact of his polices as the new PM hurries to solidify its position amongst a fragmented government.

New Funding 💶

7 companies raised €53.1 million in the last week including €1.2 million by Kwan-Tek (Quantum Sensors) and €1.2 million by NomadHer (Travel)

Events This Month 🗓

• French Tech Leader Series with Benjamin Chemla – September 9

• How corporations & startup integrate AI solutions at scale – September 12

• FDDAY – September 18

• Go Entrepreneurs Lyon – September 26

Interesting Jobs 👩‍💻

💜 Customer Marketing Director @ Qonto

📈 Growth Marketing Manager @ Electra

💶 Interim CFO @ Malt

🤓 Senior Data Operations, EMEA @ Flowdesk

👩‍💻 Senior Product Manager @ Qonto

📈 Paid Acquisition Manager @ Planity

What Else I’m Reading 📚

• European VCs see exodus of women investors (Sifted)

• Private equity comes for Fintechs as exits and funding dry up (Sifted)

• Les salaires de la Tech en 2024 (The Product Crew)

• France leads Europe’s GenAI race: Meet the 10 most funded French startups in 2024 (Tech Funding News)

Quiz Answer: A.) Blue = France . Red = US. Yellow = Europe.

While all of Europe takes time off in August no one does it quite like the French. Don’t let the August OOOs fool you though, deal activity in France peaks in June, July, and September to make up for lost time. Already, nearly as much funding was raised in the first week of September as in all of August.