Germany wants to find a solution to finalise the AI Act this month together with France and Italy, says Anna Christmann, Germany’s startup and digital economy commissioner.
Her comments come even as the government in Berlin has been blocking a final deal over concerns about extra regulations put on companies building foundational models.
“Our goal is to help find a joint solution in Europe,” Christmann told Sifted in an interview on Monday, before the crunch time negotiations in Brussels on December 6.
"I think it was important for us to go together with France and Italy and have a very clear stand that we want to have an AI act right now because it needs to be a clear situation,” she says. “It's not good that we don't know what's coming; that is always very difficult for companies to acquire investors. So we want to have the Act finalised."
France, Germany and Italy threatened to derail the negotiations in November, after negotiators said they wouldn't agree to some last-minute attempts to put more regulations on the makers of foundation models, such as Germany's Aleph Alpha and France's Mistral. The trio also proposed making transparency measures voluntary for such tech companies, according to some media reports.
Christmann says that a high priority for Germany is simply to ensure that the AI act “fosters innovation” and does not provide “too many constraints for companies in the development phase.”
As startup commissioner, Christmann is involved with rolling out the various initiatives proposed by Germany’s first ever startup strategy announced in July 2022, which includes more capital for startups via various new funds, a simplified set-up process for spinoffs and legislation to simplify the recruitment of talent from abroad. 45% of the measures have already been completed.
‘Still part of the game’
While the US and China may be leading on AI innovation, “Europe is still part of the game,” says Christmann.
Aleph Alpha’s €110m Series B round in November, one of the biggest AI rounds in Europe this year, demonstrates that a “strong AI player” can be developed in Germany, says Christmann. The Heidelberg-based company develops large language models similar to OpenAI’s GPT-4 that are designed for enterprises and governments rather than consumers.
The Series B round also shows how different areas of an ecosystem — corporations, foundations, and private investors — can come together to finance and support important technologies, says Christmann. Aleph Alpha raised €110m in equity and roughly €350m more in the form of a grant. The round was led by a group of seven new investors including Innovation Park Artificial Intelligence (Ipai), an AI campus based in Heilbronn financed by the Dieter Schwarz Foundation, Bosch Ventures and SAP. Existing VC investors Cavalry Ventures, LEA Partners and 468 Capital also participated.
AI, deeptech and climate are where Germany’s next wave of innovation will come from, says Christmann, and Germany is working to build a network of support around fledgling companies to help them scale.
This includes providing better late-stage financing options (this year, the federal government launched a €1bn deep tech and climate tech fund and a €1bn fund of funds to invest in German and European VC), as well as encouraging more interaction between universities and the private sector to “bring knowledge and expertise from universities into companies."
One of the ways the latter will be achieved, says Christmann, is through the federal government’s Startup Factories competition, which will enter into a “preparatory phase” next year.
It aims to create five-ten regional “startup factories” in Germany that have links to universities with a strong spinoff culture, are financed at least 50% by private funds and are embedded in the regional startup ecosystem, among other things. The Technical University Munich (TUM) that churns out high numbers of spinoffs every year is seen as a role model for a startup factory.
The aim is to encourage more interaction between academics and private investors, something that hasn’t traditionally been commonplace in Germany, says Christmann.
Future-proofing German business
Germany is known worldwide for its prowess in manufacturing and engineering, though its industries will have to transform to stay competitive and embrace AI in the long-term, business leaders have said.
Christmann says the government has several programs to help SMEs and larger enterprises get better acquainted with AI and other technologies. One example is the "Mittelstand-Digital network”, regional centres that advise SMEs on which technologies might be relevant for them and how they could implement them. The Mittelstand refers to small and medium-sized businesses.
“Many SMEs don’t realise that they already have very interesting data in their company that could be used for many ideas and in developing new products and entering new markets,” says Christmann.
“The network is really important because the first step (for companies) is realising what you can do with new technologies. It’s getting easier for companies to really learn what opportunities there are,” she adds.
With reporting by Zosia Wanat, Sifted's CEE Correspondent.
