Sweden has been named one of the best countries for starting a new AI company, with its most successful tech startups achieving an impressive revenue growth of 1,127%. The global market for generative AI is predicted to grow by 30-40% each year, creating intense competition to attract new business. While the US currently leads in this industry, some European countries like Sweden, Switzerland, and Germany are also considered hotspots for AI startups.
In Europe, the US ranks as the best country for setting up an AI business, followed by Singapore and Sweden. Switzerland, with its friendly business environment, takes the fourth spot, while Germany and Spain also score high in terms of business environment and finance for startups. France, home to the highest number of newly funded AI companies in the EU, is ranked 9th globally.
To further boost Europe’s competitiveness in the AI market, McKinsey & Company estimates that generative AI could add €521 billion to the European economy. However, the continent currently lags behind in several AI segments, such as raw materials and AI semiconductor design. To support AI innovation, the European Commission launched an AI innovation package in January 2024, aiming to support startups and SMEs in the sector.
The McKinsey report suggests increasing investments in AI applications for healthcare and defence, as well as supporting re-skilling programs for the workforce. Additionally, achieving competitive energy prices in Europe is crucial, as AI is expected to drive up data center power demand. The research estimates that generative AI could boost Europe’s annual productivity growth rate by up to 3% through 2030.
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