Sonali De Rycker, a prominent general partner at the venture capital firm Accel, remains optimistic about Europe’s potential in artificial intelligence but expresses concern about the continent’s challenging regulatory environment. Speaking at an industry gathering in London, De Rycker highlighted Europe’s strengths—including entrepreneurial drive, established academic institutions, abundant capital, and top-tier talent—but emphasized the crucial need to better unlock and scale these existing advantages.
De Rycker identified the European Union’s upcoming Artificial Intelligence Act as a particular point of concern. Although supportive of regulation in high-stakes sectors like healthcare and finance to ensure ethical application and consumer safety, she warned the current approach could prove excessively restrictive. The broad scope and heavy fines introduced by the AI Act risk stifling the innovation that Europe needs at a critical juncture, potentially driving entrepreneurs toward more flexible markets.
She argued that geopolitical shifts further underline the need for Europe to act assertively. With waning U.S. support under the Trump administration, the EU faces increased urgency to become economically and technologically self-sufficient. “Now that Europe is being left to fend for itself in multiple ways, we need to be self-sufficient, we need to be sovereign,” she said. De Rycker advocated specifically for initiatives like a unified regulatory system, known as the “28th regime,” a concept designed to harmonize diverse business regulations across EU member states. Current discrepancies in labor laws, licensing procedures, and corporate governance significantly hinder startups aspiring to scale quickly across borders. Harmonizing these rules could dramatically accelerate Europe’s tech industry and level the playing field with global competitors.
Despite regulatory challenges, De Rycker sees promising trends emerging in Europe’s startup ecosystems, particularly in cities such as London, Paris, Munich, and Zurich, where vibrant entrepreneurial communities are expanding rapidly. She noted Europe’s shifting attitudes toward risk, as more founders embrace experimentation and innovation. Accel itself is deeply invested across the continent, having backed startups in over seventy cities spanning Europe and Israel.
However, De Rycker emphasized that market and customer adoption still lag behind the United States. American clients display a higher willingness to engage early and experiment with emerging AI tech, more readily investing in speculative products. This appetite helps foster the type of self-sustaining innovation ecosystem that Europe has struggled to recreate.
Clarifying Accel’s own strategy, De Rycker explained the firm’s preference for investing at the application layer, rather than backing foundational AI model companies like OpenAI or Anthropic, which require enormous capital investments. Instead, Accel targets companies building business models around the application of AI, such as the video-generation platform Synthesia and the language-learning app Speak, now valued at roughly $1 billion. She draws parallels between today’s AI landscape and the transformative early days of mobile apps, citing successful platforms like Uber and DoorDash as examples of innovation that goes beyond incremental improvements to create entirely new categories and consumer behaviors.
De Rycker portrayed the present moment as a rare “supercycle” for technological innovation, cautioning that such moments of transformative opportunity do not occur frequently. Europe, she argues, faces the critical choice of either harnessing its potential through carefully balanced regulation—or severely hampering its competitiveness by overregulating. The stakes are high, since decisions made now could shape Europe’s global relevance in technology for decades to come.
When asked how European startups can increase competitiveness vis-à-vis their American counterparts, De Rycker dismissed the notion that Europe’s entrepreneurs somehow lag behind. Pointing confidently to companies Accel has supported—such as Spotify and Supercell—she asserted simply: “These founders look no different,” underscoring that the continent’s innovators have every capability required to succeed globally.
