Earlier this year, reports emerged suggesting Paris had overtaken London as Europe’s top tech ecosystem. This claim, based on Dealroom data showing a 5.3-fold increase in the combined enterprise value of Paris startups from 2017 to 2024 compared to London’s 4.2 times, remains debated. London retains its lead with 46 startups valued over $1 billion.
Nevertheless, the debate persists. Paris continues to showcase its strengths, producing renowned AI startups like Mistral and Hugging Face, alongside exceptional engineering talent. These attributes indicate that efforts should focus on establishing Paris as a globally leading tech hub, rather than emphasizing competition with London.
A turnaround in progress
Paris’s tech rise stems from the French government’s strategic role. Public investment through state-owned BPI France has injected €17.32 billion into French startups. Additional financial support, including tax incentives like the Research Tax Credit and the Young Innovative Company scheme, has fueled startup growth. Furthermore, France’s capital markets have become more open to investing in early-stage tech ventures.
Besides government support, Parisian startups benefit from France’s large domestic market, enabling local scaling by addressing national business challenges before entering new markets—an advantage over startups in smaller European nations.
To maintain Paris’s status as a tech leader, the French Government should build on successful initiatives. Advances in AI present significant opportunities, but competition is strong. Saudi Arabia’s AI strategy includes upskilling its population and launching a $100bn initiative to enhance AI infrastructure and R&D. The French government and AI advocates must pay attention to these global trends rather than focusing solely on Europe.
The talent premium is a golden opportunity
A strong funding culture has been pivotal for Paris’s tech ecosystem, but the city’s rise is also due to its exceptional talent pool. The shift of graduates from traditional careers toward entrepreneurship has transformed the tech scene. France’s elite Grandes Écoles continuously produce skilled professionals increasingly interested in startups.
The global AI boom has heightened competition for talent, as seen by Silicon Valley’s recruitment efforts and attractive pay packages. While matching US salaries may be impractical, US federal research funding cuts pose an alternative opportunity, with a Nature survey showing 75% of US-based scientists considering relocating abroad. France is well-positioned to leverage this by increasing research grants and supporting university spinouts, attracting innovative AI researchers and appealing to technical founders.
Why expanding in the US doesn’t require cutting French ties
Traditionally, French startups faced a dilemma between staying local or moving to the US for larger markets and investments. Recent examples, like Mistral, have accessed the US market by opening a Palo Alto office in 2024 without leaving Paris. Similarly, Paris-founded Hugging Face, with a New York HQ, maintains a strong presence in Paris.
Today, Paris-based startups can leverage French talent and US markets. A dual-presence strategy—using Paris for engineering and development while establishing US-based sales—offers a feasible approach.
To effectively implement this dual-market strategy, founders should seek partnerships with global venture capitalists experienced in facilitating US expansion. Investors with a US presence and a track record of aiding European founders can significantly support French startups by navigating regulations, connecting founders to local markets, and managing distributed teams.
Paris’s tech ecosystem is well-positioned for global leadership, especially in AI, due to exceptional talent and solid government backing. Moving forward, Parisian founders need a global growth mindset, moving past outdated views of abandoning French roots for US success. Stories like Mistral’s illustrate that founders can build outstanding companies without leaving Paris behind.