First up, the headline story from 13D Research, May 12, 2018:
Can his vision rescue humanity?
Facebook has undermined democracies, elections, and the fabric of society from the U.S. and Britain to the Philippines and Myanmar. YouTube, owned by Google, has become a vector of extremism. Fake news, and the propaganda that exploits it, has been toxic for public discourse. And the notion that anyone can protect their privacy almost seems quaint.In the US, a laissez-faire approach to technological progress has opened the door for chaos and authoritarianism. In China, the drive to create a total surveillance state, powered by citizen data and its homegrown tech behemoths, is the lynchpin of public policy. Around the world people are beginning to wonder: is there an alternative? Can there be a “third way” to data privacy that puts citizens, not companies or parties, first?Enter French president Emmanuel Macron, who in March delivered his country, and the world, a bold new vision. The French government will spend 1.5 billion euro ($1.85 billion) over the next five years to invest in AI research, incentivize startups and competition, and create an alternative model for data production and governance that is based on the public interest. That means making algorithms more transparent, getting companies to share and pool their data, enabling data portability, and studying the future of work.A small, nimble task force, led by the brilliant mathematician Cedric Villani, is overseeing Macron’s initiative. His team includes a machine learning researcher, an engineer with the defense ministry, and four members of a French digital technology advisory council, with expertise in everything from philosophy to law.Europe’s sweeping new data protection rules go into effect this month. The goal is to catch up to the US and China and, as Nicholas Thompson of Wired declared, “to make sure the smartest minds in AI choose Paris over Palo Alto.” It’s also about making Europe’s data economy a beacon for the rest of the world.“GDPR can be a competitive advantage for us,” one of Macron’s aides has said.Politico offered a larger frame, putting Macron’s ambitions for France within a geopolitical context: “Europe wants to conquer the world all over again.”Macron’s plan faces serious hurdles, especially in the short-term. Lacking its own stable of “homegrown champions”, France has a lot of catching up to do in terms of innovation. And even GDPR, which has Europe setting the standard for privacy protections worldwide, comes with significant flaws. It may, for example, inadvertently end up playing into the hands of the American tech giants it hopes to curb (see section 6).But long-term, Macron’s policies could go a long way towards building a more sustainable data economy and, in turn, a more vital democracy (see WILTW February 8, 2018). Unlike some of his political rivals, Macron is just as concerned with the means as he is with the ends. He aims to create a “public laboratory” on the transformation of work. He is described as “blockchain friendly.” He wants the government to collect data that can be used, and shared, by local engineers to develop AI, while incentivizing companies to make their algorithms less opaque.If this means leveraging the force of consumer society, and empowering citizens to say, “I have to better understand your algorithm and be sure that’s trustworthy,” so be it. Without an open, collective debate about algorithmic bias, “people will eventually reject these innovations,” Macron told Wired.Finally, Macron is raising ethical questions that leaders in the US and China are not. He wants to give citizens meaningful ownership and control over their data, and he’s not afraid to regulate. “I have to build a reciprocal or mutual trust coming from researchers, private players, startups, and my citizens,” Macron told Wired. “Does AI really seek to improve our well-being? If not, how can we make sure it does?”This kind of interdisciplinary thinking, if put into practice, could make Europe’s approach to AI a valuable recruitment tool and global export. What Macron envisions is a bold new framework for the internet itself, one in which fresh solutions could potentially take root and flourish. Jaron Lanier says the internet must “move beyond free” if our species is to survive. Tim Berners-Lee, having grown deeply disillusioned with the internet he helped create, is backing a system that gives users the power to decide where their data resides and who is allowed to access it (see WILTW May 3, 2018). Others, aiming to topple the data feudalists, want to pay users for online browsing and uploading quality content. In the world Macron imagines, these models could potentially grow and thrive. Society, in turn, could too.Highly-skilled workers may follow. For top AI talent hoping to serve something “greater” than Google’s advertising regime, or Xi Jinping’s communist party, a humanist AI model could be a powerful draw.We quote Macron, speaking in an interview with Wired:“In the US, it is entirely driven by the private sector, large corporations, and some startups dealing with them. All the choices they will make are private choices that deal with collective values…On the other side, Chinese players collect a lot of data driven by a government whose principles and values are not ours.If we want to defend our way to deal with privacy…the integrity of human beings and human DNA. If you want to manage your own choice of society, your choice of civilization, you have to be able to be an acting part of this AI revolution. I want to frame the discussion at a global scale.The key driver should not only be technological progress, but human progress…I mean, Europe is the place where the DNA of democracy was shaped, and therefore I think Europe has to get to grips with what could become a big challenge for democracies…[AI] could totally dismantle our national cohesion and the way we live together. This leads me to the conclusion that this huge technological revolution is in fact a political revolution.”Macron is not out to build a “European Google”. Instead, he wants to leverage an advantage that France already has: giant state-run agencies and massive troves of centrally collected public and private data. Medical-records amassed by France’s state-run hospitals, for example, are a data goldmine that is already propelling AI-powered tumor detection technology, one aide told Politico.“Paradoxically, the fact of having a big centralized state and vast public records is an advantage in this area, because you can organize the data as you see fit,” the aide said. Explained this way, Macron’s approach to AI seems to hybridize the best of the US and China, with a European twist: a “totally federalized” approach to data that puts personal freedoms first....MUCH MORE
Next is an interview with one of the American participants in the recent VC tour arranged by the French government. From Fortune, December 20:
Battery Ventures’ Chelsea Stoner on Growth Investing In the Time of SoftBank
Earlier this month, French President Emmanuel Macron invited a contingent of 40 U.S.-based venture capitalists and limited partners to come talk tech.
Investors from Andreessen Horowitz, Greylock Partners, Khosla Ventures and Battery Ventures attended the two-day roadshow in Paris that took place at Station F, the Vision Institute, iBionext and the Elysée Palace.
Chelsea Stoner, a general partner at Battery Ventures, was part of the group that went on the tour.
“They organized this trip to show how forward-thinking the Macron administration is,” she told Term Sheet. “It’s clear they want to turn France into more of an innovation capital. It’s far easier to do business there than some of us thought.”
Stoner is a growth investor who has risen through the ranks at Battery to become the first (and only) female partner in the firm’s 35-year-history. She often pursues software-healthcare companies in markets that a lot of other investors overlook. Her portfolio includes Avalara, which raised $180 million in an IPO earlier this year, as well as Brightree, Marketo, ClearCare, and Curve Dental.
In a wide-ranging conversation, I caught up with Stoner to get her impression of the French tech ecosystem as well as to learn more about some of her biggest deals and gain insight into her investment strategy.Ahead of and during the tour Reuters had a couple headlines, amusing in juxtaposition:
TERM SHEET: What was the general feeling among the VCs on the tour about investing more capital in European tech companies?
STONER: There have been good companies to come out of France, Germany, and the U.K, but being able to cross a border and become a large compelling company across Europe is difficult to do. A lot of companies tend to be pretty conservative — they get to the $50 million level and sell rather than wait for the really big outcome. Valley investors, on the other hand, are willing to take a lot of risk. Are we going to take the time to go over there if we think the founders are willing to sell early? I don’t know — that’s not really that interesting to us. So that’s still a big question. The sense in France though is that they recognize this, so they talked to us a lot about the changing attitudes around risk-taking.
You went on the trip during the “yellow vest protests” in Paris. What are some of the risks associated with deploying capital in the region?
STONER: It’s hard to say. Macron and his team have made it much more compelling to do business in France — both for entrepreneurs starting a business as well as for investors doing deals. The protests and unrest happening there obviously present a big cloud over this. I think Macron has this very strong message, and I think he’s doing everything he should be doing to make it right. Europe needs a leader in technology right now, and it would be a real shame if he doesn’t execute on his plans. But right now is a tough time to be in his role for sure....MUCH MORE
Macron to call on U.S. funds to build French start-ups, not steal themPreviously on the FrenchTech channel:
'Don't drop the ball': U.S. tech investors warn Macron over taxes
"French government officials advocate for a €500m investment in blockchain technology"
The country might be better served adding to the €1.5 billion that President Macron has pledged for research in Artificial Intelligence.
But I might be biased.
"The Race is On for European AI Research"
Profit From The Global Riot Control Industry
"The Top-10 French Artificial Intelligence Startups"
The Creator of the iPod and the iPhone Seeks to Dethrone Tech’s Giants
It’s a crisp January morning in Paris’s 13th Arrondissement, and outside Station F, the former freight terminal that is the epicenter of France’s startup scene, twentysomethings climb out of cars hailed using iPhone apps.
Tony Fadell’s Next Act? Taking on Silicon Valley—From Paris
