The European Commission and European Investment Fund (EIF) has launched a new investment program for the benefit of developments in Artificial Intelligence (AI) and Blockchain technology. The initial scope of the fund will be €400 million, but it could grow to €2 billion over time. The new initiative is seen as a stopgap measure to prevent the EU from falling behind the United States and China, which are already collectively investing nearly $1.5 billion in these areas. China has also recently announced that it is stepping up its development efforts in these areas, as well.
CoinTelegraph reported that the announcement read:
With the European Commission, we are launching a dedicated investment scheme that will make EUR 100m available to venture capital funds or other investors that support AI and blockchain-based products and services. Because these are cornerstone investments, we expect a total of EUR 300m to be generated for AI and blockchain from other private investors ‘crowding in.’
Several studies have recently touted these two technologies as major disruptors in the banking and financial services space in the years to come. Price Waterhouse Cooper claimed in their study that 52% of executives were making “substantial” investments in AI and estimated the potential cost savings to reach $447 billion by 2023.
In a similar survey, Deloitte surveyed nearly 1,400 companies in a dozen countries about blockchain and discovered that 53% of the executives polled responded that blockchain technology represented a critical priority for their enterprises in 2019. Forbes recently reported:
According to International Data Corp, total corporate and government spending on blockchain should hit $2.9 billion in 2019, an increase of 89% over the previous year, and reach $12.4 billion by 2022. When PwC surveyed 600 execs last year, 84% said their companies are involved with blockchain.
Switzerland has already established itself as a Mecca for blockchain related companies, but Switzerland is not a member of the EU. Current estimates of blockchain investments in Western Europe total $674 million, which includes efforts in Switzerland, but the figure actually puts the region in second place, so to speak. The U.S. leads with $1.1 billion, with China trailing at $310 million, but committed to spend much greater amounts in the years to come.
The announcement notes that much of this investment is devoted to research and confirming proof-of-concept, without the follow through of capital to bring scale and market acceptance of the initiative. The EIF expects this new fund to bridge this existing “gap”: “The blockchain and AI ‘financing gap’ in Europe presents an opportunity for the EIF to support these new technologies through its existing and future venture capital networks.” The Sifted website predicts investments could grow to €2 million.
The fund will commence in 2020 with initial seed capital of €100 million made available by the EIF to assist in bringing blockchain and AI-related products and services to market. Private investors are expected to kick in an additional €300 million. Up to now, much of this “follow through” investment has come from U.S. quarters, which has meant that these innovations in technology have a habit of leaving the region.
Hopefully, this new investment strategy will help reverse this “leaving the region” trend in future. Coindesk reported that the EIF concluded:
Investing in a portfolio of innovative AI and blockchain companies will help develop a dynamic EU-wide investors community on AI and blockchain. By involving national promotional banks, we can scale up the volume of investments at a national level.
More blockchain related news can be seen below:
- Central Bank of Bahrain pushing country’s bid for being a blockchain hub
- The first blockchain airline ticket is now a reality: from Dusseldorf to Luxembourg
- France enters the blockchain ‘arms race’ with largest European incubator
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EU launches €400M investment fund to enable AI and Blockchain projects was first posted on November 26, 2019 at 11:50 am.