Welcome to a new episode of the EUVC podcast, where we’ll cover recent news and movements in the European tech landscape with Dan Bowyer and Mads Jensen from SuperSeed.
Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.
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Here are the core take-aways:
The autumn budget
Why it matters: This budget marks a decisive shift in the UK’s economic strategy, with increases in minimum wage, capital gains, and carried interest tax rates aimed at redistributing wealth and fueling public services. Reeves’s budget also boosts NHS funding, energy relief for low earners, and earmarks significant funds for R&D investment, emphasizing stability and long-term growth. Mads and Dan discussed the possible implications of these measures, particularly around how Labour’s tax changes might impact investors and whether they will bring the “stability” Labour has promised.
Mads and Dan delved into the budget's impact on the startup, VC, and tech sectors, highlighting key areas where they felt Labour’s approach might clash with its “Invest” rhetoric. Mads acknowledged the importance of investing in healthcare and infrastructure, pointing out the urgent need to fix strained public services. However, he’s concerned that the budget may miss an opportunity to attract and retain top talent and private capital.
Dan was similarly skeptical, describing the budget as a “missed opportunity” to position the UK as a leading hub for investment. He cited recent policy changes in France, which made it easier for founders to invest locally, as a model the UK could have adopted.
Is ARM going to go toe-to-toe with NVIDIA?
Why it matters: This pivot could disrupt Arm’s “neutral” status as a licensor and introduce it to the high-stakes world of AI chip manufacturing, where Nvidia’s expertise has set a formidable standard. Dan and Mads explored the potential risks and opportunities, assessing whether Arm’s ambition to make its own AI chips could enhance its position in the AI ecosystem or risk destabilizing its partnerships and straining its resources.
Mads acknowledged Arm’s unique licensing model as a sustainable and strategic approach, contributing to its long-term success in the mobile industry. However, he questions whether Arm has the infrastructure and resources to manufacture chips at the scale required to compete with Nvidia.
Dan echoed this caution, noting that while the AI boom presents a lucrative opportunity, competing with Nvidia could stretch Arm’s capabilities thin. He highlighted Arm’s ongoing legal disputes with Qualcomm as a symptom of broader challenges in managing partnerships while expanding.
Volkswagen’s second profit warning exposes a carmaker in decline
Why it matters: BMW and Mercedes have similarly issued profit warnings, signaling widespread challenges in the German automotive sector. Amidst these pressures, Volkswagen and other traditional carmakers are struggling to retain market share as Chinese EV companies rapidly advance and competition intensifies globally.
Volkswagen’s warnings underscore a broader shift in the automotive industry, where German automakers—once dominant in luxury and performance—now face structural and quality challenges. Mads and Dan discussed how legacy brands like VW are grappling with quality issues, weak EV execution, and a lack of agility in adapting to the rapidly changing market, especially compared to the nimbleness of Chinese EV manufacturers.
Mads believes Volkswagen’s woes are emblematic of a larger problem within the German automotive sector: overconfidence in brand strength and a reluctance to adapt swiftly to changing technologies. He points out that the quality of Volkswagen’s recent models has diminished, risking its brand reputation just as customers increasingly turn to alternative EV options.
Dan agreed, suggesting that VW’s challenges may be partially self-inflicted by underestimating the quality and competitiveness of Chinese EV manufacturers like BYD. He observed that while German carmakers once symbolized automotive excellence, their complacency in adapting to EV and digital-first vehicles now poses a serious threat.
A Boeing Space exit would be a win-win-win
Why it matters: Boeing’s Space division, which has faced setbacks, including delays with its Starliner program and struggles to compete with emerging private space companies, may no longer align with Boeing’s core focus on commercial aviation and defense. Selling or spinning out this division could allow Boeing to streamline operations while opening new opportunities for the Space division to grow independently or under new ownership.
Divesting the Space division could benefit Boeing by reducing financial strain and allowing it to concentrate on its core strengths, particularly as it works to recover from challenges in its commercial airline sector. Meanwhile, a newly independent or differently managed Space entity could tap into the rapidly evolving commercial space market with greater agility. Mads and Dan discussed Boeing’s potential divestment, weighing the pros and cons for Boeing, its shareholders, and the broader aerospace sector.
Mads noted that Boeing’s resources have been stretched thin by competing priorities, including the need to resolve lingering issues with its 737 Max and 787 programs. A streamlined Boeing, focused on aviation and defense, would likely be better positioned to recover and innovate without the added pressures of competing in the fast-moving space industry.
Dan agreed, viewing a Boeing Space spin-off as beneficial for the space sector itself, where companies like SpaceX and Blue Origin dominate with innovation-focused business models. He argued that a spin-off could free Boeing’s Space division from the corporate constraints of a traditional aerospace company, enabling it to respond more quickly to market changes and potentially even attract new investments.
Can startups really thrive in the age of AI?
What it is: A recent Harvard Business Review article argues that as big tech companies dominate AI, startups may struggle to find a foothold unless they adapt their strategies.
Why it matters: Big tech’s resources, infrastructure, and computing power present high barriers for smaller players entering the AI space, positioning startups to thrive only if they carve out unique roles or niches.
Dan sees HBR’s position as overly cautious, noting that while big tech controls foundational models and infrastructure, startups have a powerful edge in building specialized applications and focusing on sectors where AI’s transformative power is just beginning to unfold. Additionally, Dan pointed out that startups have consistently found ways to thrive alongside tech giants by capitalizing on niche markets or innovating faster in emerging fields. He views HBR’s suggestion to prioritize enterprise collaborations as only part of the solution, stressing that the application layer in AI—where AI tools integrate into real-world industries—is precisely where startups can excel and differentiate.
New football governance bill targets parachute payments and more
Why it matters: Among its core responsibilities, the regulator will address "parachute payments"—financial compensations the Premier League provides to clubs relegated to the Championship. The bill proposes to monitor and regulate these payments if they pose a “systemic risk” to financial stability. It also includes protections for fans, such as oversight on ticket prices, restrictions on abrupt home-ground relocations, and enhanced transparency in diversity and inclusion (EDI) reporting. Additionally, it limits the regulator’s need to consider government foreign policy in club takeovers.
Mads sees the Football Governance Bill as a well-intentioned but potentially overreaching initiative, noting that although parachute payments may indeed distort lower-league competition, they also help relegated clubs avoid financial crisis. For Mads, the challenge lies in balancing this redistribution with the Premier League’s need to maintain its global standing and appeal. On the fan and community side, Mads agrees that transparency measures, such as monitoring ticket prices and ensuring that clubs remain connected to their local communities, could reinforce trust and loyalty. He is, however, cautious about the regulator’s ability to manage this balance effectively.
Meta builds AI search engine to cut reliance on Google and Bing
Why it matters: Meta’s new search engine underscores the growing importance of AI in search, as companies race to integrate generative AI and advanced language models into their platforms. While other tech giants like Microsoft, Google, and Apple have forged AI partnerships—Microsoft with OpenAI, Google with Gemini, and Apple reportedly also tapping into OpenAI—Meta has decided to go it alone. This move could mark a significant shift in Meta’s business model, positioning it to compete more directly in the AI-driven search market, where it currently lacks an established partner.
Dan sees Meta’s decision as bold but fraught with challenges. He believes Meta’s choice to go it alone without an AI partner could mean a steep learning curve, especially as Google, Microsoft, and OpenAI have already invested heavily in advanced search models. Dan acknowledges that Meta’s approach may help it avoid dependence on external tech and give it more control, but he’s cautious about how quickly Meta can build a competitive search product.
AI agents markets to reach $47.aB by 2030
Why it matters: With a compound annual growth rate (CAGR) indicating strong momentum, the AI agents market represents a significant investment opportunity for venture capitalists and tech innovators alike. This growth highlights the rapid adoption of AI-driven tools capable of automating tasks, enhancing customer interactions, and streamlining workflows across industries. The report, referenced in Venture Capital Journal and Speech Tech Magazine, underscores a major shift toward intelligent automation as companies invest heavily in AI-driven solutions to improve efficiency and drive value.
Dan sees this as a high-stakes market with abundant opportunities for startups to capitalize on specific use cases in customer service, automation, and personalized workflows. He believes the forecast aligns well with current industry trends but notes that successful startups will need to differentiate by targeting niche applications where AI agents can provide tangible value beyond what is achievable with basic automation.
Microsoft accuses Google of running “shadow campaigns” to influence European regulators
Why it matters: Europe’s regulatory landscape has become a major battleground for tech giants, as the EU seeks to enforce stricter controls on monopolistic practices and promote fair competition. This dispute centers on cloud licensing and market competition, with Google claiming that Microsoft’s practices are anti-competitive and give it an unfair advantage in the European market. This rare, public clash between tech giants highlights mounting tensions as both companies compete for cloud dominance in a region increasingly critical to their global strategies.
Dan views Microsoft’s decision to publicly call out Google as a notable escalation in their rivalry, particularly since Microsoft has traditionally favored quieter negotiations. He sees this as a sign of how high the stakes have become in the European cloud market, with Microsoft eager to protect its dominant position. He also highlights that this clash reflects broader concerns about Europe’s increasingly complex regulatory framework, which is evolving rapidly in response to big tech’s market dominance. Dan notes that European regulators, already on high alert for anti-competitive behavior, may now face mounting pressure to closely examine Microsoft’s cloud practices. However, he questions whether this conflict could backfire, potentially attracting more scrutiny on both companies and complicating their market expansions.
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