This presentation provides an overview of EU investment programs in Artificial Intelligence and Blockchain technologies. It specifically covers the new AI and Blockchain Investment Fund of the European Commission, that support early stage and growth stage of highly innovative deep tech SMEs and startups.

1. Fostering Investments in Artifical Intellegence
and Blockchain in Europe
Björn-Sören Gigler
Senior Digital Innovation Specialist,
Digital Single Market
DG Connect, European Commission
Bjorn-Soren.Gigler@ext.ec.europa.eu
twitter: bgigler
Brussels
June 2019

2. Why AI & Blockchain?
• Foundational technologies that will underpin the future of
digital transformation across whole economy
• deep-tech
• at a stage of development where volumes of investments
make a difference
• embedding values of society
• Leadership role of Europe
• The EU has leading research, knowledge and talents
• High AI and Blockchain standards (data/privacy protection;
ethical guidelines and cybersecurity)
• Engine for innovation-led economic growth
• Role for public bodies and the private sector
2
AI declaration joined
by all 28 Member
States and Norway
Blockchain declaration
with 28 Member
States, Norway and
Lichtenstein

3. A declaration of EU28+1
cooperation on AI
3
On 10 April 2018 25
European countries
signed a Declaration of
cooperation on Artificial
Intelligence
The initiative has been
joined by all 28
Member States and
Norway
Member States agreed to work together on the most important issues raised
by Artificial Intelligence
Notably the further development and deployment
of AI, including on disruptive innovation and
applications, as a matter of priority

4. A Coordinated Plan for AI*
Adoption of a first Coordinated Plan for AI “made in Europe”
7 December 2018
• Fostering innovations by increasing R&I funding:
• 2018-2020, Commission increase of its investments in AI under
the R&I framework programme Horizon 2020 to around EUR 1.5
billion (an increase of around 70% on an annual basis)
• This will contribute to the overall objective of reaching EUR 20
billion of investments (public and private) in the EU for the
period 2018-20
• Public and private investments in AI in the EU must be scaled up
to reach the target of EUR 20 billion per year over the next
decade
 Ensure a steady flow of the necessary deep tech in EU
4* COM(2018)/795

5. A declaration of EU28+2
cooperation on Blockchain
Declaration on a European
Blockchain Partnership
28 EU Member States +
Norway and Lichtenstein
5
• Recognise potential of blockchain to transform digital services in Europe
• Work together towards realising the potential of blockchain-based services
for the benefit of citizens, society and economy
• Position Europe in a leadership role
• Exchange experiences and cooperate towards a European blockchain
Services Infrastructure (EBSI): focus on cross border public services first
• Cooperation with industry

6. EU Blockchain Observatory
and Forum
• Launched on 1st February 2018
Create an expertise hub to access, share, produce and disseminate
knowledge on blockchain technologies, with objectives to:
• Mapping existing initiatives, focus on Europe + worldwide map
• Monitor technical development and trends
• Develop expertise and community building by
stakeholders' mobilisation and engagement
• Address sectoral and cross cutting issues (governance,
legal & regulatory, scalability, interoperability…)
• Build on EU interest use cases
• Inputs for EU policies / actions
6
Policy Background
eublockchainforum.eu

7. The EU has strong digital capabilities
7

8. Transformative Power of Blockchain
Source: IBM, Making Blockchain
Real for Businesses, 2015

9. Investment gap in the EU
9
Estimates consist of annual VC investment in AI-focused companies, PE
investment in AI-related companies, and M&A done by corporations. Source:
Capital IQ; Pitchbook; Deallogic; S&P; McKinsey Global Institute
“Overall Europe is behind in
private investments in
Artificial Intelligence”
AI strategy for Europe*
* COM(2018)/237
Total VC Investments in Blockchain
(2010-2018)
• North America: $5,1 billion (Canada: $623
Mill.)
• China: $1.5 billion
• Europe: $1,2 billion (CH:$414 Mill.&
UK:$312 Mill.)
• Global investment: $1.3 bill. (2018)

10. Market overview
3,221.8 4,819.11
7,345.35
11,283.76
17,267.75
25,995.68
37,987.17
53,231.4
70,971.51
89,847.26
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2016 2017* 2018* 2019* 2020* 2021* 2022* 2023* 2024* 2025*
MarketinmillionU.S.dollars
Note: Worldwide; 2016 to 2017
Source(s): Tractica; ID 607716
8
Revenues from the artificial intelligence (AI) market worldwide from 2016 to 2025 (in million U.S.
dollars)
Artificial intelligence market revenue worldwide 2016-2025
Glboal Growth of AI Revenues 2016-2025
In a digital economy,
network effects are v strong,
often leading to winner-
takes-all situation.
It requires being first & fast!

11. Blockchain: a rapidly growing market
11Source: Gartner

12. Investment Gap in AI and
blockchain
• Substantial market failure in financing of digital innovation
startups and SMEs in Europe
• Strong geographic concentration (innovation hubs in Europe)
• Highly risky investments (IP intensive, lack of collateral)
• Large investments and long-term financing needed
• Critical challenge to enhance access-to-finance for the scale-
up of innovative companies
• Despites current level of investments, it is not enough to enable
a broad adoption by EU businesses
• Many European companies obtain funding from non-EU VC
investors and start their businesses outside EU
Market related
challenges

13. Financing Challenges for SMEs and
startups focused on digital innovations
Highly innovative digital SMEs and
startups face difficulties to raise
financing:
(i) Information asymmetry between
innovators and investors
(Technology readiness
assessments)
(ii) High complexity of digital
innovations (i.e. AI and blockchain
technologies)
(iii) require large amounts of capital
(iv) IP-intensive and lack of collateral
(v) Lack of track record
(vi) require long-term financing
(patient capital)
Deep-Tech related
challenges

14. AI/Blockchain Investment Fund
Investments in AI/Blockchain “made in Europe”
• Investment for start-ups, early and growth stages
• EUR 100 million (EU contribution in 2020)
• With ambitious objectives:
• Financing a portfolio of innovative AI/blockchain companies
• Developing a dynamic EU-wide investors community
focusing on AI
• Scaling up the volume of investments at the national level
by involving the national promotional banks (NPBs) that are
willing to participate
• Incentivising further private sector investments
• making Europe become more attractive for start-ups to
stay and grow
 Prepare future support through InvestEU Programme
(starting in 2021) 14

15. An AI/BT investment instrument
Where to focus public intervention?
• Development: Companies that develop generic AI/BT
infrastructures platforms and technology solutions that
enable the use of AI/Blockchain solutions across multiple
sectors
• AI/BT Applications: Companies that develop specific
AI/BT applications across a wide number of sectors, inter
alia mobility, energy, supply chain, certification and
traceability, health, regulatory reporting and government
services
• Convergence of AI and BT: Companies that develop
AI/BT solutions that are based on the convergence of
these technologies

16. AI/Blockchain Investment Fund
Target: 1) SME & startups, for latest technology development as
well as applications adopting and scaling up AI/BT
2) AI and/or BT element is core for offering solutions
3) strong EU technology investor community (advice,
networking, management support, …)
Stage: early stage and growth stage
Instrument: existing instrument program managed by EIF
(InnovFin Equity Facility – ESFI SME Window)
Total Volume: EUR 300m- leverage EU investments through
financial intermediaries (funds investing in AI &
blockchain)
Possible co-investments by Member States (MS)
A priority action for MS under the Coordinated Plan on AI

17. EU Investment Support Program
Enabling AI/Blockchain Ecosystems
• Rapid Market Assessment/ Market Consultations :
identify key investment gaps and geographic prirorities
• Awareness Raising and Community-Building by
connecting innovators with investors
• Knowledge Sharing through a Massive Open Online
Course (MOOC) on digital innovations
• Matchmaking between AI/blockchain startups and finance
community
• Portfolio development of investment ready projects
• Investment Portal virtual marketplace for AI/blockchain
innovators, researchers, the VC community and investors
17

18. Scaling up digital innovations in Europe
Objective: Improved access to finance for innovations
Type of
businesses
Type of
Investment
Innovative
(V)SMEs
& Start-ups
High-tech
(V)SME
& Scale-ups
Equity
(early
stage)
Equity
(growth
stage)
Applications
& Take-up
Leading
Technology
development
Investment Fund
for Artificial
Intelligence & Blockchain
Scale-ups