Rival nations seek to poach top UK and European AI start-ups

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Leading European and UK artificial intelligence start-ups have been lobbied to move their headquarters to rival nations, as they become targets in a global competition to develop cutting-edge technology.

Germany’s Aleph Alpha and UK-based Synthesia and StabilityAI are among the fledgling AI companies that have been approached by officials from Canada and the UAE in recent months, according to multiple people familiar with the discussions.

The tech groups have been offered subsidies, lenient tax regimes and light-touch regulation in an effort to persuade them to move locations, these people said.

“We already have been approached by people from outside the European Union asking us basically: ‘Oh, now with all that horrible regulation, don’t you want to move your AI R&D company?’” said Jonas Andrulis, founder and chief executive of Aleph Alpha.

A person close to the German company, which is among Europe’s best funded AI start-ups, said it had been approached about moves to Canada, UAE, Singapore, the UK and Denmark.

The concerted push to attract Europe’s most promising AI companies is part of the ambition of states beyond the tech superpowers of the US and China to become serious players in the burgeoning AI industry.

Canada is already home to thousands of AI start-ups, such as Cohere, and leading researchers like Turing award winner Yoshua Bengio. It has sought to encourage AI companies and researchers to the country with policies that speed up immigration, and research and development credits.

Captain AI, which sells AI software to restaurants, is in the process of relocating from London to Canada, in a move being made to prioritise its customer base in North America.

“Companies who choose to come to Canada do so because we have a competitive economic environment and because we are a global player in artificial intelligence,” said François-Philippe Champagne, Canada’s minister of innovation, science and industry.

The UAE is also hoping to position itself as a global hub for emerging technology, offering long-term “golden visas” to AI talent and opening up its large language model Falcon for researchers and commercial use.

People close to Synthesia and Stability said the UAE has also offered generous tax rebates, as well as through the creation of its Hub71 tech hub in Abu Dhabi, backed by Mubadala Ventures, which is intended to attract start-ups to the city.

Omar Sultan al Olama, the UAE’s AI minister, said that more than 1,000 companies with a focus on AI were now operating in the Gulf state. He added the country was aiming for a “just right scenario” on regulation, that was neither too soft nor too hard, while ensuring companies operating in the UAE were compliant when selling into other markets.

Rival nations have suggested AI start-ups face less strenuous regulation than in Europe.

The EU approved its AI Act last week, considered one of the world’s strictest regimes over the technology, causing companies that offer services to European consumers to scale up compliance teams.

“This is a cost that weighs heavy on some of those companies, in addition to high energy costs and an overall high burden of regulation,” said Aleph Alpha’s Andrulis. “So it’s not ideal. I would have preferred that we focus on innovating first because innovation will secure our space in the future.”

Column chart of showing Number of workers hired in AI-specific roles

The UK has taken a more relaxed approach, relying on existing industry regulators to create rules around AI, rather than drafting bespoke new legislation. However, most UK-based AI companies are subject to the EU’s AI Act because they operate in the bloc.

Paris-based Mistral was vocal in its criticism of the AI Act as it was being drafted. The company lobbied the French government during the negotiations, saying the strict rules would prevent European start-ups from competing with US-based giants. Mistral declined to comment on whether it had been approached over moves away from France.

The EU law’s advocates, including competition watchdogs and civil society groups, said tougher regulation was necessary to prevent the potential harms caused by the rapidly accelerating technology.

Despite the approaches, Synthesia chief executive and co-founder Victor Riparbelli said it had no intention to move from the UK because the country offers a “strong international talent pool, world-leading universities in AI and the best funding environment in Europe”.

Aleph Alpha also said it was committed to its headquarters in Heidelberg, Germany and supporting “European values” and “the European ecosystem”.

“We successfully hire people from the US tech giants [and] bring them to Heidelberg,” Andrulis added. “I pitch it to our international hires as the German Tuscany.”

Additional reporting by Javier Espinoza in Brussels and Leila Abboud in Paris

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