They call it a gap, but maybe chasm is a better word.
According to VC firm Cathay Innovation, the San Francisco Bay Area has attracted over $117 billion in AI-focused venture capital since 2014 - three times more than all of Europe combined during that same period.
That was part of the motivation for Venture capital firm Cathay Innovation to launch C.Lab, a strategic advisory service aimed at helping international companies navigate the artificial intelligence revolution and bridge the innovation gap between Europe and Silicon Valley.
"With the advent of AI, the ability to transform now takes precedence over disruption. Success and longevity depend on close collaboration between all stakeholders," said Cathay Innovation Co-founder and CEO Denis Barrier, during a presentation last week at the firm's Paris offices. "We've always favored a global approach to venture capital, bringing startups together with our major industrial partners to create mutual opportunities."
The new advisory arm will be based in Cathay Innovation's San Francisco office and led by Matthieu Soulé and Arnaud Auger, who bring over a decade of experience advising international corporations on innovation strategy in San Francisco.
"Major groups are increasingly turning to external partners and startups to carry out the transformations necessary for their organizations. This trend will dramatically strengthen with the rise of AI," said C.Lab head Matthieu Soulé. "After an innovation phase, changes will gain momentum through decisive partnerships, joint ventures, minority stakes, and mergers and acquisitions."
French tech startups have made remarkable strides in recent years, ranking 4th globally in AI research publications and 5th in patents, With 338 AI startups funded between 2013-2022 and approximately 26 unicorns, France has established itself as a significant player in the global tech ecosystem.
Silicon Valley continues to dominate AI investment and development.
With the impact of AI accelerating, Barrier said it is imperative that more be done to prevent European startups and corporates from being left behind. That's because AI represents more than just another technology cycle - it's a "general technology" akin to electricity that will transform every aspect of business and society, he said.
While previous digital transformation efforts focused on incremental improvements delivering roughly 4x productivity gains, AI-driven transformation could deliver order-of-magnitude improvements: 10x revenues, 1/10th the costs, and 10x margins, Barrier added.
This transformative potential is already visible in sectors like autonomous vehicles, healthcare, and financial services. Barrier cited the example of Waymo's driverless cars in San Francisco, where AI is not just improving existing services but fundamentally reimagining them. In healthcare, AI platforms are enabling individual doctors to potentially match the productivity of 10-20 practitioners, while improving care quality.
C.Lab will offer four core services:
- Startup and tech partner scouting
- Strategic studies analyzing new business opportunities
- Business development and operational support
- Regular webcasts analyzing major trends and their implications
The advisory service will focus on key sectors including financial services, healthcare, energy, mobility, real estate, retail, and luxury goods. It aims to serve companies from Europe, North America, Asia, and Latin America.
"The main challenge lies in accessing the best partners and adopting a global vision of technological trends in their sectors," Soulé said. "C.Lab enriches Cathay's global investment activities and embodies the convergence of international corporations and innovative startups from Silicon Valley and beyond."
The timing of C.Lab's launch coincides with what many see as San Francisco's resurgence as the global AI capital. Recent data shows the Bay Area capturing nearly 50% of US AI startup investment, far ahead of other tech hubs like New York (14.2%) and Boston (6.7%). This concentration of AI talent and capital makes having a strong Silicon Valley presence increasingly crucial for international companies.
As AI drives the next wave of innovation, closer ties to Silicon Valley will be crucial.
"There are a lot of things that happen in San Francisco that will happen a little later in Europe," said Auger, a serial entrepreneur who recently was hired as Deputy Head of C.Lab. "So helping major European groups to understand what's going on in San Francisco is extremely important. Especially how much more important it is for AI to trickle down."
The initiative builds on Cathay Innovation's existing platform, which manages over €2.5 billion in assets and has invested in more than 100 startups globally. Notable portfolio companies include Chime, Pinduoduo, Glovo, Wallbox, and Owkin.
The launch of C.Lab reflects a broader recognition that success in the AI era requires more than just technological capability - it demands a deep understanding of evolving business models, cross-sector impacts, and global innovation ecosystems.
For European companies looking to compete in the AI age, having a trusted guide to navigate the Silicon Valley landscape could prove invaluable, Barrier said. This collaborative approach will be essential as companies navigate what he describes as a "fog" of technological change, where the full implications of AI transformation are still emerging.
"If you want to go fast, go alone," Barrier said. "But if you want to go far, go together."
