Could deeptech serve as Europe’s path to autonomy from the US?

Amidst geopolitical tensions and unstable markets, the query of Europe’s skill to climate the storms forward, particularly as President Trump appears intent on having his pound of tariffs from the continent, is looming massive.

However an in depth new report claims deeptech is poised to grow to be a key pillar of Europe’s safety, protection, and future autonomy, particularly from the U.S. 

Deeptech attracted €15 billion ($16.3 billion) in enterprise investments in 2024, in accordance with a 184-page report by enterprise companies Lakestar, Walden Catalyst, Dealroom and the deeptech convention, Hey Tomorrow. The report additionally discovered that just about one-third of all enterprise capital invested in Europe is now going to deep tech.

M&A exercise within the area elevated to $12.2 billion final yr, the report mentioned, but it surely additionally discovered that European deeptech startups nonetheless depend on the U.S. for exits. Moreover, 50% of the expansion capital raised by deeptech startups comes from outdoors the continent.

Nonetheless, deeptech is also seen as a hedge towards regular “momentum investing” amongst enterprise capitalists, mentioned the report. 

The report’s co-author Lukas Leitner, additionally a deeptech investor at Lakestar, informed TechCrunch that whereas geopolitical tensions pose important challenges, Europe must embrace the second, and deeptech might be the important thing that unlocks future resilience for the continent.

Nonetheless, the highway forward isn’t with out challenges. The U.S. has a “flywheel impact” in deeptech whereas Europe’s ecosystem remains to be immature, Leitner famous. “We’ve got a flywheel within the ‘shallow’ tech scene. You see a whole lot of second-time founders, popping out of Revolut and so forth, constructing nice firms. However not but from deeptech firms.”

“Europe has sturdy analysis establishments, engineering expertise, and supportive public sentiment for deeptech, however there must be coverage adjustments to foster a tradition that helps taking dangers,” he added. 

Arnaud de la Tour, the CEO of Hey Tomorrow, mentioned that the notion that compute-poor Europe would all the time lag in AI was not too long ago challenged by the looks of open-source DeepSeek: “It’s an enormous alternative for Europe, as a result of now we have nice AI expertise […] Many need to come again to Europe due to the geopolitical panorama. However we positively have to have the proper coverage framework with a view to unlock the type of potential that now we have.”

Leitner identified that Europe’s relative weak spot in computing energy is offset by its strengths in photonics computing, which gives main benefits in velocity and effectivity. “We’re actually good in Europe with photonics, as a result of now we have good laser programs, and now we have good basic analysis on the photonic facet,” he mentioned.

De la Tour added that Europe might additionally reap the benefits of a brain-drain within the U.S. as science is defunded by the Trump administration. “The Nationwide Science Basis, which is the most important supporter of founder-applied analysis within the U.S. has had its price range minimize by half. Numerous these nice scientists don’t have a job anymore, and lots of might come to Europe,” he mentioned.