In this edition:

🧠 Photonic chip startup Arago claims its light-powered processors could slash data center power consumption while keeping warehouse robots running all day instead of just one hour. Nicolas Muller, Arago's CEO and co-founder, explains the tech behind the chip and how its recent $26 million funding round will accelerate development.

🧠 AI powerhouse Hugging Face wants to bring robotics to the masses with Reach Mini: a modular, open-source, and AI-integrated desktop robot. By democratizing robotics, the company aims to spark a new wave of accessible hardware innovation.

Chris O'Brien + Helen O'Reilly-Durand

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Headlines

🗞️ Paris-based privacy tech firm Didomi acquired New York’s Sourcepoint and simultaneously raised €61 million to bolster its global footprint in enterprise data privacy. The two companies plan to integrate their server-side tracking, consent management, and attribution tools, explicitly aligning their roadmap with the rapid evolution of AI-driven marketing and personalization. Didomi’s CEO Romain Gauthier emphasized the goal of creating “the most advanced privacy infrastructure” to help businesses manage user trust, regulatory compliance, and performance in an AI‑centric environment. | EU-Startups

🗞️ Resonance published the third edition of the French GenAI landscape, revealing nearly 200 startups now active, up from just 73 in 2023. The growth is driven by fast-scaling companies reaching €5–10M ARR in under three years. The 2025 ecosystem marks a shift from simple GPT wrappers to full-fledged category leaders leveraging automation, vertical-specific solutions, and deep data integrations, according to Resonance Partner Antoine Veret. Emerging trends include voice-based interfaces, GenAI in traditional sectors like housing and law, and intensified investment in robotics and defense. | LinkedIn

🗞️ Mistral AI, in partnership with All Hands AI, has unveiled the Devstral 2507 suite—featuring Devstral Small 1.1 (open-source) and Devstral Medium 2507 (API-only)—designed for agentic code reasoning, multi-file editing, and long-context program synthesis with a 128k‑token window. Devstral Small 1.1, licensed under Apache 2.0, achieves 53.6% on SWE‑Bench Verified and runs locally, while Devstral Medium scores 61.6%, outperforming Gemini 2.5 Pro and GPT‑4.1 at a fraction of the cost. | Mistral

🗞️ France and the UK launched a strategic partnership in AI and supercomputing, inaugurating a collaboration between the University of Bristol’s Isambard‑AI (UK) and France’s GENCI centre to scale computing capacity and advance frontier AI research. French President Emmanuel Macron, speaking at Imperial College London, emphasized that “the UK and France…are lagging behind both the US and China” and urged close cooperation to build sovereign AI capabilities. In tandem, Macron and the CNRS launched the Ayrton‑Blériot engineering lab at Imperial, tasked with harnessing AI and emerging technologies across engineering disciplines to bolster sustainability, resilience, and strategic innovation. | Yahoo News

🗞️ A French Senate fact-finding commission has released a landmark report analyzing the impact of generative AI on artistic creation, warning that it poses an “existential threat” to cultural industries by harvesting copyrighted works without consent and generating rival content at scale. Led by Senators Agnès Evren, Laure Darcos, and Pierre Ouzoulias, the report rejects a binary view of AI versus human creativity, instead advocating for a European “third way” that balances innovation with strong copyright protections. The mission outlines eight guiding principles—including transparency, fair remuneration for rights holders, and systems to identify AI-generated content—and proposes a three-phase strategy involving dialogue, legislation, and potential taxation of AI companies operating in France. The report criticizes the weakness of the current EU and French legal frameworks, especially around the use of cultural data in training AI, and highlights the risk of cultural homogenization, job displacement, and long-term degradation of AI models. Ultimately, the Senate calls for firm action to protect the integrity of human creativity while fostering responsible AI development. | French Sénat

🗞️ French prosecutors have launched a criminal investigation into Elon Musk’s X platform over accusations of algorithmic manipulation and clandestine data extraction aimed at enabling foreign interference in France’s public discourse. The probe, initiated on July 9 by the Paris cybercrime unit (J3) following complaints by MP Éric Bothorel and a senior cybersecurity official, focuses on whether X’s algorithms were tweaked to promote racist, anti‑LGBTQ+, and extremist content. The inclusion of data tampering charges marks a significant escalation from earlier regulatory scrutiny, reflecting growing concern that automated content systems could undermine democratic integrity. | Reuters, TechCrunch, Politico

🗞️ French IT powerhouse Capgemini announced a $3.3 billion cash acquisition of Indian outsourcing firm WNS, at a premium of $76.50 per share, aiming to strengthen its “agentic AI” and generative AI capabilities in business process services. The deal is designed to create a global leader in AI‑powered intelligent operations, enabling enterprise clients to automate and optimize end‑to‑end processes. It also boosts Capgemini’s footprint in the lucrative U.S. market and taps into WNS’s customer base of over 700 clients, including Coca‑Cola and United Airlines. | Reuters, WSJ

🗞️ France Climbs the Data Center Ranks. France has become Europe’s #3 data center heavyweight, clocking 714 MW in capacity by end-2024 — a 40% jump in a year. With AI and cloud needs ballooning, the sector is sprinting toward 2.3 GW by 2030. The catch? Electrical hookups can still take 7 years. Faster power, please! | Usine Digitale

🗞️  Cloud Royale: OVH Takes the Crown. OVHcloud is reigning supreme over France’s public sector cloud buys, racking up €13M in H1 2025 - triple Microsoft’s take. Under the government’s “Cloud au centre” doctrine, total orders have hit €57.6M across nearly 300 public entities. | Usine Digitale

🗞️  AI Budget Boss. In 2025, generative AI is the No. 1 IT budget priority for 45% of French tech decision-makers, beating out cybersecurity, compute, and storage. But with talent shortages biting, only 19 out of 45 pilot projects make it to production. Build or buy? Most go for plug-and-play, with 62% betting on external models. | Usine Digitale

🗞️  Mistral in Mega-Fundraising Talks. Fresh off its $6.5B valuation, French LLM champ Mistral is reportedly eyeing a cool $1B in fresh equity, with Abu Dhabi’s MGX fund leading the charge, and even more in debt from lenders like Bpifrance, per Bloomberg. Already working with MGX and Nvidia on Europe’s largest AI datacenter, Mistral could soon cement its spot as the crown jewel of Macron’s AI sovereignty play. | TechCrunch, Usine Digitale

 🗞️ Relief raises €2.6M to kill Excel. Relief has raised €2.6 million to modernize the dusty world of industrial quoting, where engineers still grind away on Excel to price complex manufacturing jobs. The AI co-pilot it’s building doesn’t replace engineers, but handles 80% of tasks. Backed by Daphni, OSS Ventures, Kima, and others, Relief wants to reach 100 industrial SME clients by end-2026 and bring quoting time (and headaches) way down. Bonus: each model is trained on a client’s private data only — no CAC 40 envy necessary. | Les Echos

🗞️ SiPearl Turns to Taiwanese Investors to Boost Europe’s AI Chip Ambitions. The rising French star in AI supercomputer chips faces tough funding challenges despite Europe’s push for tech sovereignty. SiPearl has secured a new €32M investment from Taiwan’s Cathay Ventures and partnered with chip giant TSMC for production because Europe lacks the manufacturing capacity. With its first CPU, Rhea1, set to roll out soon, SiPearl aims to power Europe’s exascale supercomputer Jupiter and hopes to be a key player in upcoming AI Gigafactories. A bold step in bridging the gap between European innovation and global chip manufacturing. | Les Echos

Other Headlines

🗞️ A game changer for France's military: How AI is transforming the defence industry | In this exclusive report, FRANCE 24's Elena Volochine met some of the French forces learning how to use this technology, as well as the engineers developing them and the top officials working on a framework for them to operate in. | France 24

ICYMI

🗞️ VSORA: The French AI Chipmaker Taking on NVIDIA with High-Performance, Cost-Efficient AI Hardware | Backed by €40 million in funding, CEO Khaled Maalej believes the company is set to disrupt the AI hardware market with its Jotunn8 chip, leveraging a fabless model and advanced chiplet architecture to slash the cost of deploying large language models and generative AI at scale. | The French Tech Journal

🗞️ Figma's CPO On Navigating The GenAI Revolution: 'It's A Very Dynamic Landscape.' | Chief Product Officer Yuhki Yamashita discusses how the design company abandoned its traditional planning process to build AI-powered products as it adapts to the rapid evolution of GenAI capabilities. | The French Tech Journal

🧠 Photonic Chip Startup Arago Wants to Cut AI's Massive Energy Appetite by 90%

Arago, founded just over a year ago, believes it has cracked one of artificial intelligence's most pressing problems: its voracious appetite for electricity.

Last week, the company announced it had raised $26 million in seed funding to commercialize what it calls a "multiphysics processor" – a chip that uses photons instead of electrons to run AI models while consuming a fraction of the energy of today's graphics processing units (GPUs).

The timing couldn't be more critical. As AI systems proliferate across industries, their energy demands are becoming unsustainable. Data centers already consume approximately 1% of global electricity, and this figure is projected to increase to 3-4% by 2030 as AI workloads continue to grow. Each advanced GPU can consume as much power as a household oven – around two kilowatts – while running continuously in server farms.

"You can think of a processor, the GPUs, as a board with billions of transistors," said Nicolas Muller, Arago's CEO and co-founder. "Transistors are switches like you have in your house and that turn on and off. And every time they turn on and off, they dissipate a lot of heat. You can imagine that in a current GPU, you have 80 billion of them, and they switch around two to 3 billion times per second."

The result, he notes, is a processor "more dense than the heart of a nuclear power plant."

🧠 Hugging Face’s $299 Reachy Mini Signals A New Era In Personal Robotics

For years, robotics has been the domain of big tech, deep research labs, and prohibitively expensive hardware.

Now, Hugging Face, a company best known for revolutionizing open-source AI tools, is aiming to do the same for robots. Last week, the New York-based company with three French founders launched “Reachy Mini,” a $299 desktop humanoid robot.

Hugging Face is hoping Reachy could mark a turning point in making robotics accessible to the masses. Executives believe that the robot’s low price, modular design, and integration with Hugging Face’s vast AI model ecosystem could do for robotics what the Raspberry Pi did for computing.

“We’re thrilled to finally share what we’ve been building,” Hugging Face co-founder Thomas Wolf posted on LinkedIn. “Reachy Mini is our first hardware product—and it’s just the beginning.”

AI Funding News

📇 Company: SiPearl
🔍 Description: Designer of microprocessors for European exascale supercomputers, with a focus on HPC, AI, medical research, and energy management
💻 Website: https://www.sipearl.com/
📍 HQ City: Maisons-Laffitte
🧗 Round: Series A
💰 Amount Raised: €32M (final trance of €130M round)
🏦 Investors: Cathay Venture
👨💼👩💼 Founders: Philippe Notton
🗞️ News: Data Center Dynamics

📇 Company: Tandem
🔍 Description: Startup building in‑app AI agents ("execution layer") that perform tasks within software to help users navigate, configure, and adopt advanced features seamlessly, reducing friction and support needs.
💻 Website: usetandem.ai
📍 HQ City: Paris, France
🧗 Round: Seed
💰 Amount Raised: €3.2 million
🏦 Investors: Tribe Capital, backed by Hexa startup‑studio support
👨💼👩💼 Founders: Christophe Barre (CEO & Co‑Founder) and Manuel Darcemont
🗞️ News: Funds will accelerate integrations with enterprise apps, enhance the AI execution layer, scale customer success, and support the launch of a U.S. HQ in San Francisco. | EU-Startups

📇 Company: VizioSense
🔍 Description: Sensors with on-board AI and computer vision for Smart(er) cities, buildings, and industries
💻 Website: http://viziosense.com
📍 HQ City: Lille
🧗 Round: Seed
💰 Amount Raised: €2.7M
🏦 Investors: Alacrité France
👨💼👩💼 Founders: Maxime Schacht, Amine B, Jichen Jiang
🗞️ News: VizioSense will accelerate its European rollout of ethical, edge‑AI optical sensors that optimize urban mobility—such as parking, flow analysis, and crowd management—without any video surveillance or image storage. | Alliancy

📇 Company: Relief
🔍 Description: An AI-powered platform automating complex industrial quoting processes, helping manufacturers convert technical specs into optimized quotes, structure proprietary expertise, and improve margins and conversion rates.
💻 Website: https://reliefapp.ai
📍 HQ City: Paris
🧗 Round: Seed
💰 Amount Raised: €2.6M
🏦 Investors: Kima Ventures, Daphni, Galion, OSS Ventures
👨💼👩💼 Founders: Mickael Mamou, Jonas Levy
🗞️ News: The funding will allow Relief to hire 20 team members and scale toward 100 customers by the end of 2026, addressing a multi-billion-dollar opportunity in digitizing industrial quoting with tailored AI. | LinkedIn

📇 Company: Optimistik
🔍 Description: A French SaaS company enabling industrial firms to democratize the use of data and AI through a platform that enhances production traceability, operational performance, and sustainability metrics such as GHG emissions and water consumption.
💻 Website: optimistik.com
📍 HQ City: Chambéry, France
🧗 Round: Growth capital
💰 Amount Raised: €1.7M
🏦 Investors: Fonds Régional Avenir Industrie Auvergne-Rhône-Alpes, Crédit Agricole Alpes Développement
👨💼👩💼 Founders: Mathieu Cura (President), Jean-François Hénon
🗞️ News: The funding will support Optimistik’s international expansion (notably in North America), continuous platform innovation, including generative AI assistants, and its mission to bridge AI adoption and real-world industrial operations. | LinkedIn

📇 Company: LABEL4.AI
🔍 Description: A French cybersecurity and AI startup developing sovereign, industrial-grade solutions to trace, detect, and control generative AI content, aiming to combat fraud and reinforce digital trust in content production and dissemination.
💻 Website: https://label4.ai/
📍 HQ City: Paris
🧗 Round: Pre-seed
💰 Amount Raised: €1M
🏦 Investors: Undisclosed
👨💼👩💼 Founders: Anthony Level, Vivien Chappelier, Rony Abecidan, Ph.D., Teddy Furon, Mathieu Desoubeaux
🗞️ News: The funding will support industrialization of LABEL4.AI’s proprietary technologies, team structuring, and acceleration toward becoming a key European player in generative AI traceability and content integrity. | LinkedIn

🗣️ Announcements 🗣️

🗣️ Google Startup Perks program | We're excited to launch our new Startup Perks program, offering exclusive benefits and discounts from 20+ leading AI and tech companies within the Google Cloud ecosystem. | More information

🗣️ The Government has launched a call for “Digital transition of culture and the appropriation of artificial intelligence” projects. | As part of the France 2030 initiative, the goal is to support the digital transformation of the cultural and creative industries. This initiative aims to help cultural actors adopt AI while ensuring ethical use and copyright protection. The program encourages collaboration between cultural organizations and tech companies to develop innovative solutions, from data-sharing tools to secure content management. It seeks to enhance the competitiveness of French creative industries and promote a responsible, Europe-focused AI ecosystem. | More information

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