Europe has more AI users than the United States. It matches the US for AI talent. It produces as many AI startups every year. And yet, when the world tells the story of artificial intelligence, Europe barely gets a mention.
That is the central paradox of a new report called State of AI in Europe: The Invisible Giant, released by Prosus and Dealroom.co. Drawing on the most comprehensive dataset ever assembled on Europe’s AI landscape, the report shows a continent that has quietly built the foundations for AI leadership, while allowing the value of that work to flow to the US, and increasingly China.
Europe’s AI funding hit a record $21.8-billion in 2025, up 58% in a single year. Its 133-million monthly LLM users is nearly double those of the US. Three of the world’s ten most-cited AI scholars are European. And yet, almost every AI model those users run was built in America or China. Almost three-quarters of the investors backing Europe’s breakout AI companies are American. The continent grows the companies; someone else owns them.
The report identifies this not as a failure of talent or innovation, but as a failure of capital and structural ambition. And, crucially, it argues both are fixable.
“Europe is at a crossroads in the global AI race, but we are too slow,” says Fabricio Bloisi, CEO of Prosus. “We have world-class talent, yet without fast, major investment in our own compute and open-source models, we risk dependence on others. The countries and companies that move now will define the next decade. Europe is changing, but things are not moving fast enough. Let’s build as if Europe’s future depends on it, because it does.”
Three paradoxes
The report uncovers three structural contradictions that define Europe’s position today:
• The Talent Paradox. Europe has roughly 325,000 AI professionals – the same number as the United States. Three of the ten most-cited AI scholars globally are European. And yet 53% of European AI talent works in traditional economy roles such as industrial groups and consultancies, compared to 40% in the US, and six of Europe’s top fifteen AI employers are US Big Tech companies.
• The Usage Paradox. Europeans are the world’s most active AI users. Europe’s 133-million monthly LLM users nearly doubles the US figure. But almost every model they use was built in America or China – meaning European users are, in effect, training and improving algorithms owned by others.
• The Startup Paradox. Europe creates as many new AI startups each year as the US. But it converts them into breakout companies at a third of the rate. By the time a European AI company reaches late stage, 73% of its lead investors are American. Europe incubates; the US captures.
Where from here
The report maps out precisely where Europe can win, from open-source AI models and best-in-class vertical applications to the wide-open frontier of World Models. It also looks at what it will take to get there: mobilising growth capital, eliminating internal friction, and giving European founders a regulatory environment they can actually build on.
- The full analysis, data and recommendations are available to read and download at prosus.com.