Upside: European Tech & VC Weekly

Overview: In this episode of Upside, hosts Dan Bowyer and Mads Jensen, along with guests Andrew Scott and Lomax Ward, delve into their 8 bold predictions for 2025. 

Covering everything from AI and space tech to geopolitical tensions and venture capital trends, they unpack what’s on the horizon for tech, business, and venture in Europe and beyond.

2025 Predictions and Discussions:

1. Apple will win AI
2. Open AI will be dethroned 
3. Conflict with China
4. Defence Tech will boom
5. EU and UK will wake up and focus sovereign control on AI, Quantum and Space  
6. Space tech will really lift off 
7. US heads into recession 
8. M&A up IPOs up

00:00 Introduction to Upside and the Future of AI
02:46 Apple's Potential win in Consumer AI
06:11 OpenAI dethroned? Leadership and Future Challenges
11:49 China, geopolitical Implications of AI and Defence
23:52 Defence Tech Investment will boom
31:17 Hardware isn't always bad for VCs
32:14 UK and EU Sovereign Control and Technological Progress in 2025
33:39 The Importance of AI, Quantum Computing and Space to Europe
35:36 Space Tech really lifts off in 2025
38:26 Space Manufacturing and 'Why' Exploration
42:17 Timings and Market Predictions
51:33 The State of European Venture Capital
54:26 VC and the Role of Technology in Economic Growth
57:15 M&A and IPO Predictions for 2025

Key Topics Discussed:

Apple’s AI Strategy
Dan predicts Apple will dominate consumer AI by leveraging its ecosystem, resources, and loyal fan base. Mads questions whether Apple has lost its innovation edge and explores what "winning" consumer AI means.

OpenAI's Future
OpenAI faces challenges as competitors like Google, Anthropic, and XAI push forward. The panel discusses leadership struggles, funding needs, and the possibility of new technologies dethroning OpenAI.

Geopolitics and Defence
The impact of China's ambitions toward Taiwan and the West’s response. Defence tech as a booming sector, with increased NATO spending and opportunities in dual-use technologies.

Space Tech Expansion
Investment in space technologies continues, focusing on communication, defence, and manufacturing. The challenges of scaling space ventures and predictions for a more affordable and accessible space economy.

Economic Outlook for 2025
US economic trends point to a possible mild recession, while Europe faces stagnation due to political and economic challenges. Insights into concentrated stock markets, corporate performance, and venture investment trends.

M&A and IPO Resurgence
Pent-up demand for M&A deals and a likely reopening of the IPO market in 2025, with companies like Klarna leading the charge.

The European Venture Landscape
Challenges in scaling European startups and the need for founders to integrate US business DNA early. Calls for greater ambition to build trillion-dollar companies and reinvigorate Europe’s industrial base.

Memorable Quotes:

Dan Bowyer: “Apple’s ecosystem gives it a fighting chance to become the de facto standard for consumer AI.”

Mads Jensen: “Europe needs to back great founders and rebuild its industrial base.”

Andrew Scott: “Space tech is the future, but timing is everything. A lot of startups will fail before the sector truly takes off.”

Closing Thoughts:
The panel concludes with their personal focus areas for 2025, emphasising a love for early-stage European founders, the need for industrial reinvention, and how we can push boundaries in venture capital.

In this episode we review significant events of 2024, focusing on the rise of AI, the challenges Europe faces in building its own AI infrastructure, and the political and economic landscape shaped by the recent elections. We chat venture capital trends, the impact of geopolitical shifts in the Middle East, and the future of TikTok amid national security concerns. 

• Altman and Musk face off while Elon builds Colossus.
• The AI war heats up in big tech 
• Is Labour competent enough to build business in Britain?
• Should Europe build chips?
• The Bitcoin Act.
• Will Trump Switch us off?
• The Trump sugar high. Coming to Europe?
• Will TikTok go down to Chinatown?
• More M&A means more business, recycling, investment
• Agentic workflows to impact the Enterprise
• More IPOs in 2025.
• The geopolitical landscape in the Middle East & implications for us all.
• 2024 inc VC was volatile but performed well. How?

00:00 2024: The Year of AI Ascendancy - Musk builds Colossus.
05:48 Europe's AI Infrastructure Challenge
12:12 Political Landscape and Economic Predictions
18:03 Venture Capital Trends in 2024
24:02 Geopolitical Shifts in the Middle East
29:58 The Future of TikTok and National Security
35:58 Looking Ahead: Startups and IPOs in 2025

Mads and I chatting this week about all things VC, investing, startup affecting Europe,

• Can the UK govt really think like a startup? Should it?
• The British DOGE.
• No one in the Labour govt has ever run a business. Matter?
• Why China's downturn will batter Europe.
• The European brain drain - is it real?
• Freedom of movement, is it coming back?
• Quantum is here, or is it.
• The old guards are coming out to solve Quantum.
• Can startups survive red ocean? If so how?
• Execution vs Novel.
• European startup of the week - Stegra.
• Why green steel is so important.

We're in a studio this week, sounding joojie. Mads and I discussing this week's news, views and thoughts around Europe, startup, and investing. What's moving the needle, what's not, and why.

The Decline of Europe’s Automotive Industry
◦ The shift from internal combustion engines (ICE) to electric vehicles (EVs).
◦ Why Chinese automakers are dominating global markets.
◦ Can Europe recover, or is the industry destined for slow decline?

Trillion-Dollar Companies: Can Europe Compete?
◦ Why Europe has yet to produce a trillion-dollar company.
◦ Strategic importance of big tech companies for economic growth and national influence.
◦ Key sectors that could drive Europe's first trillion-dollar success: biopharma, quantum technology, and energy.

China vs. the US: The Resource War
◦ The implications of China restricting exports of critical metals like gallium and germanium.
◦ How this trade war impacts Europe and global supply chains.
◦ The importance of resource independence and domestic production.

The AI Cage Match: Elon Musk vs. Sam Altman
◦ The history of OpenAI, its pivot to a for-profit model, and Musk’s fallout.
◦ The rise of XAI and the battle for AI supremacy.
◦ Will Nvidia face real competition in the AI chip market?

Founder Corner: The Psychology of Founders
◦Insights into founder breakups and the challenges of building a startup.
◦How Europe’s culture of risk aversion may hinder innovation.
◦The importance of supporting founders to build resilient, long-term businesses.

Bitcoin and Morality
◦A heated debate about the ethics of Bitcoin and its role in the economy.
◦Speculation, regulation, and the future of cryptocurrencies.
◦Does Bitcoin represent humanity’s worst impulses, or is it a driver of innovation?

1st Dec 2024 - This week in Euro VC.

Super happy to have Lomax from outsized.vc with us today bringing an extra edge of health tech. 

Dan shares his experiences with nekohealth.com full body scanning. 

What's the future of preventative scanning, when will it be NHS ready and what opportunities are there for startups.

ChatGPT is 2! How OpenAI stole the march on Google, who invented the transformer.

LLMs - what's next and from whom.

Northolt. Gah. Into administration she goes - $21bn spent but is it all lost?

Recursion and ExScientia - how they bowed out stage right with a whimper.

Are psychedelics back? Will RFK open European doors?

Cradle Bio - Boom! Massive series B - bring on Europe!

Summary
Dan and Mads discuss key developments in European venture capital, focusing on the recent Slush event, the implications of Bitcoin hitting $100k, Anthropic raising $4bn, the volatility of Bitcoin - what is it and what will it become, Klarna's US IPO, does Europe need it's own search engine? Are we at peak AI?

Takeaways
Slush is great, founders focused, 13,000 attendees.
Bitcoin to hit $100k? But it's what? And is it good for us?
Anthropic raises $4bn but are we at peak AI?
Klarna - Europe's exceptional founders have nowhere to go but the US
Revolut gets its UK license and is after you mr big bank.
Does Europe need its own search engine? Howabout no.

Chapters
00:00 Insights from Slush: A Major European VC Event
09:00 The Future of Bitcoin and Government Regulation
16:06 Challenges in AI Development and Data Limitations
22:54 Local vs Global Search Engines: A European Perspective

This week in European VC - Dan and Mads explore the real revenue generated by AI startups, not hAIpy at all, no one went to COP29, the EU startup passport is arriving much sooner than anticipated, Germany's instability as an opportunity, AI is programming, insights from a recent MIT report on material science, and the global and local economic ramifications of Trump's administration. 

The average time for an AI startup to hit $1M in revenue is 11 months.
COP29 has seen a lack of attendance from major world leaders.
The EU startup passport aims to simplify regulations for startups.
Germany's government collapse could lead to more European reforms.
AI is 25% of coding at Google.
It's proven - AI significantly enhances productivity in material science.
Trump's election results. His focus on economic issues won over identity politics.
Increased M&A activity in 2025. Bitcoin up. IPOs up. Climate and humans be damned.
Startups will find new opportunities in this changing global landscape.

Chapters
00:00 AI Startups: Real Revenue vs Hype
05:47 EU Startup Passport: A New Era for Entrepreneurs
11:17 AI in Code: The Future of Software Development
17:04 Trump's Election: Implications for Global Economy
22:32 Opportunities and Challenges for European Startups

Show Notes and links

Dan - AI start-ups generate money faster than past hyped tech companies - 
https://www.ft.com/content/a9a192e3-bfbc-461e-a4f3-112e63d0bb33 

Average time  for an AI company to hit $1m is 11 months. SaaS is 15.

Cursor grew from $4M ARR to $4M/month in less than 12 months. AI is not just hAIpe - https://www.arr.club/signal/cursor-arr-at-50m-growing-crazy-from-4m-in-april 

AI vs SaaS Growth: AI start-ups reaching $30 million in annual revenue do so in about 20 months, five times faster than earlier SaaS firms.

Global Demand: Roughly 56% of AI companies’ revenue comes from international markets, with substantial purchases in regions like Singapore and Iceland.

Notable Examples: OpenAI, ElevenLabs, and DeepL are examples of successful AI companies. OpenAI’s ChatGPT became the fastest-growing consumer app, generating $3.6 billion in annual revenue despite high operational costs.

COP29 - none of the big wigs are there - Forty-eight fewer heads of state are addressing COP29 than last year. Xi Jinping and Joe Biden—presidents of the two biggest oil-producing countries - won’t be there. Russia not there. What will this mean for startups?

https://www.bloomberg.com/news/articles/2024-11-11/cop29-negotiators-agree-on-some-rules-for-global-carbon-market?sref=KkPzpZvz&srnd=homepage-americas

New UK target for 81% emissions cut by 2035 https://www.bbc.com/news/articles/cx2ny8zndpxo

The new EU Startup passport
Announced by Ursula von der Leyen - EU Commission President

German Government has collapsed
Scholz calling for new elections

AI Now Writes Over 25% of Code at Google - 
https://uk.pcmag.com/ai/155094/ai-now-writes-over-25-of-code-at-google

Google Confirms Jarvis AI Is Real by Accidentally Leaking It - 
https://gizmodo.com/google-confirms-jarvis-ai-is-real-by-accidentally-leaking-it-2000521089?

Artificial Intelligence, Scientific Discovery, and Product Innovation* by Aidan Toner-Rodgers† at MIT
https://aidantr.github.io/files/AI_innovation.pdf

- AI automates 57% of idea-generation tasks, allowing scientists to focus on evaluating AI-suggested compounds.
- It reduces repetitive, low-value research directions.
- AI-assisted researchers discover 44% more materials, leading to a 39% increase in patent filings and a 17% rise in product prototypes that incorporate these materials.

Trump globally. Trump administration to the UK and Europe - what next?

In this conversation, Dan and Mads discuss what Trump will and won't do now he's in. IS CHIPS out? As Europe's CHIPS is in? UK's investment woes with such little support from Govt. Warren Buffett cashes out - Apple now. Is the market over priced? GS thinks so. AI disrupting big tech gets bigger. Founder burnout is back, bigger and badder so what role should venture capitalists play?

Full contents

• Drama drama - The 2024 election will have significant implications, for all.
• Trump's policies will open the M&A landscape.
• The CHIPS Act - Will he really repeal it?
• Europe's semiconductor strategy vs the U.S.
• Will the UK government finaaalllly get round to prioritising investment? 
• Warren Buffett's cash out hits $325bn 
• The AI race is poking Google in the eye, again.
• Startup founder burnout goes big 
• Building a VC backed startup is, just, brutal. Know the beast.

In this conversation we dig into the UK's Autumn Budget - it's just *not* investor or build friendly - gah, Germany launches more non-profits, will ARM enter the AI arms race *against* it's own customers?!... and yet *more* regulation - this time in the beautiful game, but why that matters.

Chapters
00:00 Juvenile Politics
00:27 UK Autumn Budget: Invest Invest Invest! Ok, don't then.
04:22 Economic Growth Needs the Right Frameworks
08:12 The Future of Startups in an AI-Driven World
13:09 ARM vs Nvidia: Arm Getting in the Arms Race?
21:40 Volkswagen's quality problems
25:27 Football Regulation. Hang on. I thought you said less regulation?

In this conversation Dan and Mads explore crazy hAIpe valuations at Perplexity, Claude controlling the desktop in Enterprise - but RPA is nothing new, Palantir, the NHS and patient records? Is everyone becoming a media company? American markets will chill the growth now, what will a Trump administration really mean for the economy? And more...

Chapters
00:00 AI Valuations are Going to be hAIpe. Right?
01:58 AI in RPA in the Enterprise - I won't close the podbay doors Dave.
03:45 NHS Digital Records, Palentir, any Opportunities for Startups?
07:24 NHS Technology (failed) Implementations
10:09 The Future of Workforce and AI Integration
12:59 The Content Economy - is Everyone Becoming a Media Business?
15:47 Europe's Innovation Gap Again - Will Draghi win out?
18:38 AI's is the Only Way to Grow (Within the Resources we Have)
21:43 What Will a Trump Admin Really Mean for the Economy?
24:28 The Future is a Gift