[pembrook]

> what is keeping them back, though: Money? Compute? Skills? Training data?

All of the above and more. Everything holding Mistral back is the same thing that has held Europe back from competing in the entire digital revolution. See this 1991 article lamenting the loss of any viable European PC manufacturer: https://www.nytimes.com/1991/04/22/business/europe-stumbles-...

Mistral being in Europe is disadvantaged with:

1. Money: less diverse private pension fund environment = less LPs to invest in VC funds = less VC dollars to invest in new ventures. European money is vacuumed out of the private sector into state pension funds and dumped into low yielding government bonds. This starves the private sector of capital while inflating the % of GDP driven by government spending every year (government pension funds buying government bonds in circular fashion enable runaway deficit spending...just like circular AI infrastructure spending).

2. Talent & compute: due to #1, Silicon Valley can outbid Europe for the best talent and hardware. Watch an OpenAI launch video and listen to all the European accents.

3. Local market fragmentation: Europe is a collection of countries that pretend to work together while not even having a unified capital market. The average EU citizen can barely communicate with their neighbor in a common language beyond the level of a toddler (english fluency is massively overstated by Americans who only experience tourist capitals).

4. Regulatory disadvantages: In everything from company regs, employee regs, unions, privacy regs, data portability regs, etc.

It's not "culture" or Europeans being "lazy" as most people would claim. There's currently thousands of young french people working 80 hour weeks creating dumb consulting powerpoints or legacy investment banking deal memos as we speak. Ambitious people exist everywhere in equal proportion, they're just working on the wrong things.

Europe can't compete in the digital revolution the same way they could compete in the industrial revolution due to various system design choices. Culture is simply the aesthetically observed byproducts of system design.

[dash2]

>The average EU citizen can barely communicate with their neighbor in a common language beyond the level of a toddler (english fluency is massively overstated by Americans who only experience tourist capitals).

Not true in my experience: even German waiters in small towns tend to have pretty fluent English.

[CalRobert]

It varies a lot. Germany is pretty strong in English, and the Netherlands next door is exceptional, but as you go south to Italy, etc English proficiency weakens.

Edit: more broadly, there’s just more friction when people aren’t in their first language. I know I hesitate to bring up some things, say hi to strangers, try making a joke, etc because the cost of talking is just… higher.

[pembrook]

Was just driving around medium and small-ish towns in Bavaria. This was not my experience at all.

The German speaking members of our group had to order food for us in most restaurants.

And most locals aren’t waiters in restaurants.

[cj00]

> 4. Regulatory disadvantages: In everything from company regs, employee regs, unions, privacy regs, data portability regs, etc.

Agreed. My own anecdote: my company is global and for the past 6 months, we've been working on getting regulatory and legal approval for an LLM-based feature. The initial proposals of going live in all of our markets have been pared back to exclude Europe altogether due to the regulatory environment.

When I took part in company-wide gen AI councils that reviewed new product rollouts, it seemed like there was a definite hesitation from higher ups from pushing out any leading edge features to European markets. And it's not that the regulations would necessarily block these features from going live but that they'd increase implementation costs to the point where it wouldn't be worth it.

[PeterStuer]

1 and 2 are the same. Infinite money without barely any consequence because of 'reserve currency' privilege. To compete with that, the EU can't nuke the dollar because it would be suicide given the Eurodollar realities, and they can't anchor EU ip and talent because our politicians are too intertwined with globalist ideology and capital.

[snowpid]

"they can't anchor EU ip and talent because our politicians are too intertwined with globalist ideology and capital." You want to force staying in the EU?

[PeterStuer]

You think other regions do not anchor strategic industries? The EU is extremely lax in this regard.

[snowpid]

so why do you use the term globalist? Most talent is globalist anyway.

[_fizz_buzz_]

> 2. Talent & compute: due to #1, Silicon Valley can outbid Europe for the best talent and hardware. Watch an OpenAI launch video and listen to all the European accents.

There is definitely a lot of truth to that. Maybe a bit of an arbitrary measure, but these are the nationalites of the people that wrote the "Attention is all you need" paper. Pretty revealing I find:

Ashish Vaswani: India

Niki Parmar: India

Jakob Uszkoreit: Germany

Llion Jones: Wales (UK)

Aidan Gomez: Canada

Łukasz Kaiser: Poland

Illia Polosukhin: Ukraine

Noam Shazeer: USA

[snowpid]

Yes that was 2018. Things vastly deteriorated in the US.

[Shitty-kitty]

You say that as if the American version of maximalist Capitalism is good or desirable to most people.

Personally, I would much rather have good public pensions and health-care, than A.I agents.

[pembrook]

This has nothing to do with it.

The US also has public pensions (social security payouts rival or beat many EU countries) with dramatically better tax free private options on top.

Also, the US has free healthcare (Medicare and Medicaid) for roughly 50% of its population.

Expanding that to 100% doesn’t suddenly make them a bad country to do business in.

You think OpenAI is going to close up shop and move to Mexico if the US expands single payer healthcare? That would actually make it even easier for businesses to operate in the US!

[Shitty-kitty]

Social Security and Medicare are vastly inferior to their European counterparts. Medicaid is an absolute disaster and a large number of doctors and health facilities will not even accept it.

[pembrook]

Not true in the case of average social security payouts. But again, this argument is a total derailing of this thread and addresses none of my points.

Explain to me how expanding US single payer healthcare suddenly makes the US a worse place to do business in than Europe?

Companies would love not having to deal with the complexities of 401ks and employer health plans.

[Shitty-kitty]

You must have misunderstood me. I never argued that US single payer healthcare would be bad, just that one based on expanding medicaid bottom-rung insurance, would not be adequate.

[moffkalast]

Yeah and data protections. GDPR, data frugality laws, etc. may be the end of Mistral but it's a small price to pay for corporations to not have free range over every minute detail of our lives. Americans just accept it because they have already lost. We haven't, in fact we've just won recently with chat control being struck down. Meta can no longer train on and monitor every Whatsapp chat without being criminally liable.

[manmal]

Maybe we will have only agents, soon.

[Fnoord]

> European money is vacuumed out of the private sector into state pension funds and dumped into low yielding government bonds.

Which countries do that? The ones in NL actually invest in US big tech.

Once Europe stops investing in USA, Europe will be better able to compete.

> Talent & compute: due to #1, Silicon Valley can outbid Europe for the best talent and hardware. Watch an OpenAI launch video and listen to all the European accents.

That just denotes European students are high quality.

Brain drain is happening due to bullying and fascism. The extend of longterm danage of current administration is unclear.

> Local market fragmentation: Europe is a collection of countries that pretend to work together while not even having a unified capital market. The average EU citizen can barely communicate with their neighbor in a common language beyond the level of a toddler (english fluency is massively overstated by Americans who only experience tourist capitals).

Bollocks. I have been in Berlin and Munich various times past decades, and people there speak English very well. Nowadays, translation is a profession which got hit by the AI club.

The people in the rural areas don't have to work together with other people from rural areas. They just need websites and tooling in their native language, or a major language.

Case in point: the French company Mistral has Dutch company ASML has one of their major investors. If you go to Eindhoven area (Netherlands mini SV called Brainport Eindhoven), you get away with English perfectly fine, and there too you will hear all kind if accents.

[pembrook]

> Which countries do that?

Every single one invests in government bonds with a large allocation. Aside from the pure ponzi scheme ones with no actual fund where its money in -> money out.

Also, if Europe stopped investing in US equities their pension insolvency problem would get about 2-3X worse given US equities have far exceeded EU equity returns over the past 20 years.

> Brain drain is happening due to bullying and fascism. The extend of longterm danage of current administration is unclear.

Huh? Did you even see the headline of the 1991 article I linked? Brain drain has been happening because of everything I listed which has been true for decades. Europe couldn't come up with a relevant company in PCs, Operating Systems, Internet 1.0, Social media, Mobile, AI, etc. None of it is due to the current administration.

> Bollocks. I have been in Berlin and Munich various times past decades, and people there speak English very well.

Yes, and while you were traveling to tourist capitals occasionally I've been actually living in Europe. Your perception is not the reality the average German person lives.

The problem isn't that the smartest Engineers in Europe don't speak english. The problem is that the average person in the markets they would sell into don't speak a common language.

Kind of hard to cut deals and build a brand among 27 different insular, hyper nationalist markets in a bunch of languages you don't speak with completely different regulations.

[WhyComboNadir]

re: #4 Maybe it’s easier if you grow up in the system and know how to navigate the written and unwritten rules, but as a dual Canadian-American who recently gained Austrian citizenship, the regulatory friction is absolutely real. I decided to launch a new venture through an Austrian GmbH.

There are supposedly streamlined paths for local residents, but I had to go through the standard corporate pipeline. I spent three months fighting a bizarre catch-22 between my notary (who cost €3k+) and the bank. To open the account, I had to prove I deposited €10k in capital. But I couldn't make the deposit without an active bank account. On top of that, the bank's compliance team kept arbitrarily canceling my application due to "incorrect answers"... refusing to tell me what the errors actually were and forcing me to restart the entire process ab initio.

I finally just gave up. I wrote off the €3,000 notary fee and €1,000 in registered office costs as a sunk cost, and incorporated a US LLC instead. It took under 10 minutes, no notary, fees of $25 since I did it myself, plus another 20 minutes to open the business bank account.

There was no commercial reason to choose Austria; it was purely sentimental. My ancestors were entrepreneurs in Linz and Vienna, and I loved the idea of renewing that legacy. But the sheer weight of the bureaucracy managed to kill about 99% of the early-stage startup enthusiasm you normally rely on to get a new project off the ground.

[mike_hearn]

That catch-22 is supposed to be broken by the bank. It's a two phase commit where you open the account in a special state where you can only deposit the capital. Then the bank gives you evidence you've done so, you take that to the notary and open the company, then send the evidence you've done that back to the bank to convert it into a full account.

It's a bizarre system that Switzerland uses too. I've done it twice. Unfortunately the German speaking world has a lot of rules that are trying to eliminate all risk for investors and employees. The GmbH/AG capital requirements are just the start.

The next fun thing you might have encountered, at least in Switzerland, are rules that literally say your company's assets can't fall below 50% of your initial capitalization. If it does you're supposed to raise funds or make more investment of your own private capital and this rule pierces the usual liability requirements. Even more fun: it turns out that this law isn't actually enforced and locals regularly ignore it. But bad accountants won't tell you that. They'll just inform you of the law when you do your yearly accounts.

Then you have wealth taxes that cover the valuation of a startup as if it were a cash position. So if you raise $100M in investor funding then whatever shares you have left over are considered to be liquid assets you can offload at will, and are wealth taxed as such. The fact that the shares don't trade in a liquid market is irrelevant to the tax authorities. In Zürich at least that got patched by the local tax office deciding that startup shares aren't counted for the wealth tax, but this just means you have to be able to convince the tax authority that your company is a startup. The way they determine this is more or less just the opinion of whoever at the tax office assesses your case. Does it sound "startuppy" enough?

Fixing this stuff isn't hard, but it never gets fixed because European politics is both quite stagnant and dominated by people who view hostility to business as a virtue signal. They don't want to fix it because they think businesses are sort of like oil fields. They just exist, lying around naturally, and the only question is how to maximally exploit them.

[WhyComboNadir]

re: catch-22. I was surprised to learn of it, but then even more surprised to get caught up in an endless loop even when I followed the process.

For European countries it seems like a left-hand-right-hand problem: I go to a party at the Los Angeles Austrian consulate, or a "Start Up Austria" event in SF and listen to them pitch bringing businesses to Austria (the left hand). But back home the "right hand" and culture seems to look down at people who have accumulated wealth, and be hostile to the idea of the most simple reforms that would actually make someone want to move their business to Austria/EU. For example, the intrenched interests of needing a notary paid a few thousand Euros, are screwing the whole country so one set of people can fill an archaic role.

Do you know how much a notary costs in the US? If you go to a UPS or FedEx store, it is typically about $10-15. If you go to your own bank they do it for free.

And get this, when you incorporate a company in a US state, guess how many things need to be notarized? None. As you fill out the forms you are swearing to their truth, and accepting a notice that you are committing perjury if you are untruthful. Do they check your statements right then to make sure you're not lying - absolutely not! Why bother, you haven't started anything yet. But by God, if 5 years later when you're making money, the IRS finds out that you lied, then you're going to wish you were living in another country.

In other words, the timeframe for the risk concern is completely backwards in Europe: the risk management basically stops 95% of things from happening in the first place, including the 0.001% the might be fraudulent. Wouldn't it be better to let 1,000,000+ companies get formed, then 50,000 of them naturally become a meaningful success, then take a closer look at their compliance once they are truly a real business.

I had some ignorant biases against doing business in Europe before starting this process - and I was hoping that experience would change my mind - but the funny thing is that my biases weren't strong enough! (my bank and incorporating story above is just one example of many). No thank you EU!

(My first businesses were started in Canada, and I thought Canada was so backwards compared to the US in being business friendly, but now I realize Canada is maybe 90% as business friendly as the USA. EU, in my experience is like 5% as business friendly as USA)