European AI Investment Boom in H1 2025 Hits €3.04 Billion
European AI-native startups attracted €3.04bn in investments in H1 2025, a 61% increase from 2024, with AI agents and sovereignty emerging as key trends.
Excitement around AI shows no signs of slowing down in 2025. According to Sifted data, investments in AI-native startups in Europe reached €3.04bn in the first half of the year—a 61% increase from the same period in 2024 (€1.89bn). The number of investors backing AI startups in Q2 2025 (342) nearly tripled compared to Q1 2024 (128).
The AI Boom: Applications Take Center Stage
Investors are shifting focus from foundational models to real-world applications, particularly AI agents—systems that automate tasks without human intervention. This sector saw deal counts surge 226% year-on-year, with funding hitting €1.7bn. Notable players include:
- Synthesia (UK): Raised $180m Series D at a $2.1bn valuation and secured additional funding from Adobe.
- Lovable (Sweden): Raised $15m pre-Series A and is now eyeing a $1.8bn valuation.
- Isomorphic Labs (UK): Raised $600m in one of Europe’s largest AI rounds.
However, the boom comes with warnings of a bubble, as some startups face challenges:
- 11x (UK): High churn due to product issues.
- H Company (France): CEO stepped down amid leadership concerns.
- Builder.ai (UK): Entered insolvency after reports of faked business dealings.
AI for Sovereignty: Europe’s Push for Competitiveness
With US protectionist policies and Chinese AI firms gaining traction, Europe is doubling down on homegrown AI. Key developments:
- France: Announced €109bn in AI investments over five years.
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Alex Thompson
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Senior technology editor specializing in AI and machine learning content creation for 8 years. Former technical editor at AI Magazine, now provides technical documentation and content strategy services for multiple AI companies. Excels at transforming complex AI technical concepts into accessible content.