Kate Jarvis says Europe will beat Silicon Valley in vertical AI

Why European VCs Built a Better Strategy

According to Kate Jarvis, CEO of Fifth Dimension, European investors approached the boom differently. They skipped the infrastructure hype. Instead, firms like Speedinvest focused immediately on practical integration. The defining question for European tech was never about building raw research power, but understanding how machine learning transforms legacy operations from day one.

The Pragmatic Path to Enterprise Value

This regional divide is already showing concrete results in M&A activity. Major foundation model labs are actively acquiring European startups because these teams built functional, highly specialized applications. While US players build horizontal tools hoping someone finds a use case, European founders engineered domain-specific solutions that enterprise clients actually buy. This pragmatic focus on execution makes their portfolio companies highly attractive targets.

America Struggles with Domain Specificity

The consequences of this strategic divergence will take years to play out fully. US investors remain largely disconnected from the realities of non-tech sectors. They struggle to grasp what deep automation looks like in complex industries like financial services. While American VCs play catch-up, European builders are quietly capturing the highly profitable vertical AI market.