Sonali De Rycker, a normal companion at Accel and one in all Europe’s most influential enterprise capitalists, is bullish concerning the continent’s prospects in AI. But she’s cautious of regulatory overreach that would hamstring its momentum.
At a TechCrunch StrictlyVC night earlier this week in London, De Rycker mirrored on Europe’s place within the international AI race, balancing optimism with realism. “We have all of the items,” she instructed these gathered for the occasion. “We have the entrepreneurs, we’ve the ambition, we’ve the colleges, we’ve the capital, and we’ve the expertise.” All that’s lacking, she argued, is the power to “unleash” that potential at scale.
The impediment? Europe’s complicated regulatory panorama and, partly, its pioneering however controversial Artificial Intelligence Act.
De Rycker acknowledged that rules have a job to play, particularly in high-risk sectors like healthcare and finance. Still, she mentioned she worries that the AI Act’s broad attain and probably stifling fines might deter innovation on the very second European startups want area to iterate and develop.
“There’s an actual alternative to ensure that we go quick and deal with what we’re able to,” she mentioned. “The difficulty is that we’re additionally confronted with headwinds on regulation.”
The AI Act, which imposes stringent guidelines on purposes deemed “excessive danger,” from credit score scoring to medical imaging, has raised purple flags amongst buyers like De Rycker. While the targets of moral AI and client safety are laudable, she fears the web could also be forged too huge, probably discouraging early-stage experimentation and entrepreneurship.
That urgency is amplified by shifting geopolitics. With U.S. assist for Europe’s protection and financial autonomy waning beneath the present Trump administration, De Rycker sees this second as a decisive one for the EU.
“Now that Europe is being left to fend [for itself] in a number of methods,” she mentioned. “We have to be self-sufficient, we have to be sovereign.”
That means unlocking Europe’s full potential. De Rycker factors to efforts just like the “twenty eighth regime,”a framework aimed toward making a single algorithm for companies throughout the EU, as essential to making a extra unified, startup-friendly area. Currently, the mishmas of labor legal guidelines, licensing, and company constructions throughout 27 nations creates friction and slows down progress.
“If we have been really one area, the facility you might unleash could be unbelievable,” she mentioned. “We wouldn’t be having these similar conversations about Europe lagging in tech.”
In De Rycker’s view, Europe is slowly catching up—not simply in innovation however in its cultural embrace of danger and experimentation. Cities like Zurich, Munich, Paris, and London are beginning to generate their very own self-reinforcing ecosystems due to top-tier educational establishments and a rising base of skilled founders.
Accel, for its half, has invested in over 70 cities throughout Europe and Israel, giving De Rycker a front-row seat to the continent’s fragmented however flourishing tech panorama.
Still, on Tuesday night time, she famous a stark distinction with the U.S. on the subject of adoption. “We see much more propensity for purchasers to experiment with AI within the U.S.,” she mentioned. “They’re spending cash on these sorts of speculative, early-stage firms. That flywheel retains going.”
Accel’s technique displays this actuality. While the agency hasn’t backed any of the main foundational AI mannequin firms like OpenAI or Anthropic, it has centered as an alternative on the appliance layer. “We really feel very snug with the appliance layer,” mentioned De Rycker. “These foundational fashions are capital intensive and don’t actually seem like venture-backed firms.”
Examples of promising bets embody Synthesia, a video era platform utilized in enterprise coaching, and Speak, a language studying app that just lately jumped to a $1 billion valuation. De Rycker sees these as early examples of how AI can create fully new behaviors and enterprise fashions, not simply incrementally enhance current ones.
“We’re increasing complete addressable markets at a fee we’ve by no means seen,” she mentioned. “It feels just like the early days of cellular. DoorDash and Uber weren’t simply mobilized web sites. They have been model new paradigms.”
Ultimately, De Rycker sees this second as each a problem and a once-in-a-generation alternative. If Europe leans too closely into regulation, it dangers stifling the innovation that would assist it compete globally – not simply in AI, however throughout your entire tech spectrum.
“We’re in a supercycle,” she mentioned. “These cycles don’t come usually, and we are able to’t afford to be leashed.”
With geopolitical uncertainty rising and the U.S. more and more inward-looking, Europe has little selection however to guess on itself. Whether it may achieve this with out tying its personal fingers stays to be seen. But if the continent can strike the correct stability, De Rycker believes it has all the things it wants to steer, and never simply comply with, within the AI revolution.
Asked by an attendee what EU founders can do to be extra aggressive with their U.S. counterparts, De Rycker didn’t hesitate. “I believe they’re aggressive,” she mentioned, citing firms Accel has backed, together with Supercell and Spotify. “These founders, they give the impression of being no totally different.”
You can catch catch the total dialog with De Rycker right here :
