In this edition of La Machine:

🧠 Cathay Innovation's new $1 billion AI fund challenges Silicon Valley's model by focusing on collaboration that connects AI startups directly with corporate giants to transform industries rather than disrupt them in an era where 'everybody has to play.' Co-Founder Denis Barrier explains the strategy and the urgency.

Chris O'Brien + Helen O'Reilly-Durand

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Headlines

🗞️ Meta has made waves by refusing to sign the EU’s newly released voluntary AI “Code of Practice,” labeling it “legal overreach” that could stunt innovation and create legal uncertainty for AI developers. In a recent LinkedIn post, Joel Kaplan, Meta’s chief global affairs officer, argued the guidelines extend far beyond the requirements of the EU’s AI Act and echo concerns shared by 45 European companies. While industry heavyweights like Microsoft are expected to sign the code as a way to align with emerging EU regulations, Meta stands apart, warning that this move could “throttle the development and deployment of frontier AI models in Europe." The split highlights growing tension between U.S. tech giants and Europe’s bid to balance innovation with oversight under its historic AI legislation. | Reuters, The Wall Street Journal

🗞️ Mistral AI is kicking its Le Chat chatbot into high gear with a flurry of fresh features and open-source swagger. First up, the new Deep Research Mode turns the assistant into a bona fide research partner by asking follow-up questions, scouring sources, and delivering structured, reference-backed reports for everything from market trends and business strategy to personal planning. Voice interaction also leaps forward thanks to Voxtral, Mistral’s first open‑source speech AI. Available in robust 24B and lightweight 3–8B versions, it offers real-time speech-to-text, summarization, and voice-triggered actions at less than half the cost of proprietary APIs. And users can now chat with Le Chat out loud, brainstorming ideas, transcribing meetings, or asking spoken questions in a natural, low-latency flow. Mistral also rolled out “Projects,” a workspace feature that groups related chats, settings, files, and tools into one organized folder, ideal for long‑term, multi-step tasks. Behind the scenes, the chatbot's “Magistral” engine powers improved multilingual reasoning and code‑switching prowess. | SiliconANGLE, TechCrunch, VentureBeat

🗞️ European VC funding may be slumping, but AI startups are still being sprayed with a fire hose of cash. According to Sifted, €3.04bn poured into AI-native startups in the first half of 2025, up 61% from the same period last year. Investors are flooding in, with nearly triple the number of active AI backers compared to early 2024, chasing breakout stars like Synthesia, Lovable, and DeepMind spinout Isomorphic Labs. Agentic AI is the hottest ticket, but hype comes with hiccups: some buzzy startups have stumbled, with buggy products, leadership shakeups, and even scandals. | Sifted

🗞️ Librinova and Les Nouveaux Éditeurs have teamed up to equip their publishing houses with an AI-powered manuscript scanner that identifies passages written or edited by AI . Tested by the imprint La Tribu, the tool flags AI usage in about 7 % of submissions so far. Rather than banning AI‑assisted texts, the group wants to inform editors about the true origins of content, marking a shift in transparency . Built on a three‑step process—highlighting, statistical/style analysis, and result triangulation—it reflects the growing push for clarity in the age of machine‑assisted creativity. | Actualitte

🗞️ The CNIL, France’s data watchdog, has ruled that so-called “augmented” cameras used in tobacco shops to estimate customers’ ages via AI are in breach of the GDPR, calling them “neither necessary nor proportionate,” in a decision published July 11, 2025. These AI-equipped cameras, tested by several tobacconists since late 2024, constantly monitor and analyze facial features to gauge whether someone is a minor before selling age-restricted items like cigarettes, alcohol, or lottery tickets. The CNIL emphasized that simply reading ID cards remains the only reliable method to verify age, making the live facial scanning intrusive and excessive. As a result, these deployments violate privacy rules and must be halted, underscoring the regulator’s zero-tolerance stance toward unrestrained biometric surveillance in retail spaces. | Le Monde

Other Headlines

🗞️ Hugging Face Is Hosting 5,000 Nonconsensual AI Models of Real People | Users have reuploaded 5,000 models used to generate nonconsensual sexual content of real people to Hugging Face after they were banned from Civitai. | 404 Media

🗞️ Carrefour Brings Machine Vision to the Aisle: France’s AI Ambition Comes to Life | Carrefour, one of the world’s largest retail chains, is turning heads with the trial of a cutting-edge artificial intelligence (AI) and machine vision platform at its hypermarket in Villabé, France. In partnership with VusionGroup, Carrefour is piloting a high-tech system that may define the future of physical retail, where shelves manage themselves, prices stay accurate in real time, and customer journeys are enhanced by visual intelligence. | MVPRO Media

🗞️ French voice actors feel threatened by AI as machines risk shaping entertainment industry | While some artists see artificial intelligence as an opportunity to push their creative boundaries and innovate, others are concerned about being replaced by machines. In France, voice actors are calling for its use to finally be regulated so as not to jeopardize their work and livelihoods. | France 24

ICYMI

🗞️ Photonic Chip Startup Arago Wants to Cut AI's Massive Energy Appetite by 90% | A year-old French company claims its light-powered processors could slash data center power consumption while keeping warehouse robots running all day instead of just one hour. | The French Tech Journal

🗞️ Hugging Face’s $299 Reachy Mini Signals A New Era In Personal Robotics | The AI powerhouse wants to bring robotics to the masses with its modular, open-source, and AI-integrated approach. By democratizing robotics, the company aims to spark a new wave of accessible hardware innovation. | The French Tech Journal

🗞️ How Tilt Energy Uses AI to Cut Power Costs and Emissions by Optimizing Grid Flexibility | The startup wants to transform how France manages electricity demand with AI-powered software that enables flexible energy use to avoid costly infrastructure upgrades. Tilt recently raised a €5M seed round led by Daphni to accelerate its development. | The French Tech Journal

🧠 Cathay Innovation's $1B Bet On Rewiring Venture Capital For The AI Age

For Denis Barrier, the release of ChatGPT in November 2022 was the moment that changed everything for venture capital.

"We were very surprised by the violence of the event," said the Co-Founder of Cathay Innovation, describing the seismic impact of OpenAI's breakthrough. That "violence"—the sudden, transformative arrival of mainstream AI—didn't just disrupt industries. It rewrote the playbook for how venture capital itself operates.

The proof is in the numbers.

This May, Cathay Innovation closed its Fund III at $1 billion, making it the largest AI-dedicated venture capital fund to emerge from the European Union.

This isn't just another mega-fund chasing the AI gold rush. It represents something more fundamental: a reimagining of how startups and established corporations can work together in an age where, as Barrier put it, "it's AI time, it's the new technology shift, and it's happening now."

AI Funding News

📇 Company: One Biosciences
🔍 Description: Operating a ‘discovery engine’ leveraging single-cell technologies to identify new therapeutics for difficult-to-treat diseases.
💻 Website: http://onebiosciences.fr/
📍 HQ City: Paris
🧗 Round: Series A
💰 Amount Raised: €15M
🏦 Investors: Kima Ventures, Sofinnova Partners, InVus, Redmile Group, Polytechnique Ventures, Galion.exe, Blast Club, Adamed Technology
👨💼👩💼 Founders: Dr. Céline Vallot, Hedi Ben Brahim, Magali RICHARD, David Schilansky
🗞️ News: Pulse 2.0

📇 Company: Retab
🔍 Description: Retab is building a complete developer platform and SDK for shipping state-of-the-art document processing in the age of LLMs.
💻 Website: N/A
📍 HQ City: San Francisco
🧗 Round: Seed
💰 Amount Raised: $3.5 million
🏦 Investors: Eric Schmidt (former Google CEO), Xavier Niel, Olivier Pomel (CEO of Datadog), Florian Douetteau (CEO of Dataiku), K5 Global, VentureFriends
👨💼👩💼 Founders: Louis de Benoist (CEO), Sacha Ichbiah (CTO), Victor Plaisance (CPO) (Alumni of École Polytechnique and HEC Paris)
🗞️ News: 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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