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Tuesday, July 23, 2024

French AI Startups Face Setback After Election

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In Short:

The left-wing New Popular Front in France is pushing for increased taxation, causing concern among startup industry leaders. Foreign investors, including Google and Microsoft, have recently made significant investments in France’s AI sector. The upcoming elections could lead to a shift in government, potentially impacting the industry. Despite uncertainty, industry leaders believe in the sector’s resilience and hope for a moderate government to provide stability.

According to Varza, the left-wing New Popular Front is advocating for increased taxation measures, reminiscent of the pre-Macron era. She references France’s 2012 “les pigeons” movement, where internet entrepreneurs protested against Socialist president François Hollande’s plan to raise taxes for founders.

Maya Noël, CEO of France Digitale, expresses concerns about France’s ability to attract foreign talent and investors. Big tech companies like Google, Microsoft, and Meta have shown interest in investing in AI infrastructure in France. The upcoming election could affect France’s attractiveness to foreign investors.

Election Impact

The upcoming election could reshape the French Parliament and result in a prime minister from either the far-right or left-wing coalition. This uncertainty may lead to government gridlock, with the possibility of “cohabitation,” where the president governs with a prime minister from the opposition party.

Industry Response

AI startup Mistral, co-founded by former digital minister Cédric O, has refrained from publicly commenting on the election. Despite concerns in the tech industry, some like Gilles Babinet believe that the far-right poses a greater threat than the left-wing alliance.

Industry Confidence

Industry insiders like Stanislas Polu believe that the tech sector has the momentum to survive political uncertainties. While acknowledging potential financial impacts, they remain hopeful for moderate governance in the country.

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