Time for Practical AI Application

In 2025, Artificial Intelligence (AI) is set to be the dominant technology theme, and Europe stands at the cusp of becoming a global leader in applied AI. With its industry knowledge, diversified economy, and growing AI ecosystem, the continent presents a historic opportunity to take the helm.

According to the AI.FUND VC fund, the most promising investment fields for applied AI in Europe in 2025 are focused on AI-native startups developing generative AI applications, AI agents, specialized AI hardware, AI infrastructure, and agentic AI systems that perceive, decide, and act autonomously.

Key thematic areas include:

Generative AI and agentic AI: Startups creating generative AI models and agentic AI platforms are attracting large funding rounds. Synthesia, Lovable, Parloa, and Berlin-based agentic AI firm Parloa are prime examples.
AI infrastructure and computing power: Investments target AI infrastructure, with companies offering APIs to run and fine-tune AI models, like Together AI. Plans for AI Gigafactories across Europe aim to deploy state-of-the-art GPUs and large-scale computing to support advanced AI models and future AI challenges like Artificial General Intelligence (AGI).
Healthcare and drug discovery AI: Companies integrating AI for drug design and clinical decision-making, such as Isomorphic Labs and AMBOSS, are prominent.
Enterprise AI infrastructure and AI orchestration platforms: Startups like Legion focus on enterprise AI infrastructure, simplifying data transformation, secure model deployment, and AI operationalization at scale.

The EU market’s largest investment pockets for applied AI align with software including AI-driven decision intelligence, generative and agentic AI, healthcare AI, and advanced AI infrastructure, supported by regulatory and funding initiatives to build computing capacity at scale. These sectors are expected to drive European AI innovation and VC interest through 2025.

The true value of AI comes from specific applications in businesses, healthcare, industry, or the public sector. AI adoption in core business functions like sales, finance, and IT security has exploded in the last two years, leading to structural changes with concrete value.

Industrial AI is a growing field in Europe, focusing on optimizing production lines, preventing failures, and improving manufacturing quality through AI. Enterprise AI offers tremendous scaling potential and can integrate relatively quickly into existing system landscapes. AI platforms serve as tools that allow companies to develop, monitor, and integrate their own AI solutions into existing processes.

John Lange, one of the most experienced experts in Corporate Venture Capital (CVC) in Germany, is a founding partner of the venture capital fund AI.FUND. Lange was responsible for Axel Springer's startup investment activities for over 13 years, driving the company's digital transformation as a best practice.

The second STARTUPLAND event will take place on November 5th. The event will feature talks from successful founders, insightful interviews, and pitches that inspire. AI tools are often horizontally applicable and internationally scalable, making them attractive investments for VCs.

European startups struggle to keep pace with capital-intensive AI developments, but Vertical AI, specialized intelligence for entire industries, offers a market advantage through industry-specific solutions based on very specific data. Special generative AI, specific systems for automatic content creation, fundamentally change work processes in certain areas. Developing Large Language Models (LLMs) requires billion-dollar investments and specialized hardware, primarily controlled by US and Chinese tech giants.

AI agents & autonomous systems, intelligent assistants that control complex business processes or prepare human decisions, are another promising area. Industrial AI, AI tools for manufacturing and production, and Enterprise AI, AI tools for businesses, are growing fields in Europe.

In conclusion, Europe is well-positioned to lead the global AI revolution. With the right investments and initiatives, the continent can unlock the potential of AI for entrepreneurial investors and drive innovation through 2025 and beyond.

Technology is expected to play a significant role in driving European AI innovation and VC interest through 2025, as the EU market's largest investment pockets for applied AI align with technology sectors such as AI-driven decision intelligence, generative and agentic AI, healthcare AI, and advanced AI infrastructure. Artificial-intelligence agents and autonomous systems, which are intelligent assistants that control complex business processes or prepare human decisions, are another promising technology area for the continent.