European Commission building in Brussels, Belgium. WindEurope
The European Commission and the European Investment Fund (EIF) have set up a new fund for blockchain and Artificial Intelligence (AI) innovation, the EIF announced in a blog post on 20 November.
According to the announcement, the new fund was created to prevent the E.U. from falling behind countries such as the U.S. and China, and elevate Europe’s position as a home for blockchain and AI development.
The new investment scheme will make €100 million available to venture capital funds or other investors that “support AI and blockchain-based products and services”.
The EIF further stated that these are only “cornerstone” investments, and that it expects the fund to generate an additional €300 million from private investors “crowding in”.
As the scheme will also allow national promotional banks to co-invest, starting next year, the estimated total of the fund could raise even further. The EIF said in the blog post:
“Investing in a portfolio of innovative AI and blockchain companies will help develop a dynamic EU-wide investors community on AI and blockchain. By involving national promotional banks, we can scale up the volume of investments at a national level.”
The EIF has also stated that the vast majority of venture capital funds supporting blockchain technology are not located Europe, but are based elsewhere.
As such, many developers and entrepreneurs end up receiving financing from the U.S., or start working for U.S. companies, which often leads to the opportunities and economic growth associated with these technologies leaving the E.U..
Even though the E.U. is investing quite a bit in blockchain technology already, most of the investments are focused on research and proof-of-concept, while very little goes towards development and growth.
The aim of the new fund is to address this fact, and act as a catalyst for future investments into “large scale projects” in the E.U..
The EIF announcement further stated that Europe is the second highest spending region in the world, estimated to spend $674 million on blockchain technology in 2019, according to the International Data Corporation.
While the United States is first place, with an estimated spending of $1.1 billion, China has ranked third with $319 million.
Even though China is currently only in third place when it comes to spending on blockchain, the recent comments made by its president, Xi Jingping, could change that.
Last month Xi said that the technology has a wide range of applications within the country, and that China should accelerate its adoption of blockchain technology.