VC funding in Europe: AI leads for the first time ever

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Welcome back to The Pulse, where we dive into interesting AI stories and trends backed by data, all presented through simple visuals.

> Europe VC funding $58B in 2025, up 9% YoY vs US +46% YoY (driven by AI mega-rounds)

> AI became Europe’s #1 funded sector for the first time, with $17.5B in 2025 vs $10B in 2024

> overall startup investment still above pre-COVID levels for 3 straight years

> Mistral AI raised Europe’s largest 2025 round (~$2B) led by ASML

> other large AI rounds went to Nscale, Brevo, Helsing, Isomorphic Labs, Black Forest Labs

> healthcare & biotech second-largest at $13.4B, hardware third at $10.8B - reflects Europe’s focus shift to deep tech

> social media time spent nearly flat in 2025 (3.3T → 3.4T hours), clear sign of digital fatigue

> meanwhile genAI time spent hit 48B hours in 2025, up 3.6× YoY & 10× 2023

> genAI sessions crossed 1T, far outpacing downloads (3.8B) showing habit formation, not novelty

> social apps still control 60% of total mobile time but incremental attention growth is near zero → losing traction in attention economy to AI

> first time in history: non-game apps overtook games in in-app purchase revenue, reaching $85B (+21% YoY); genAI was the single largest driver

> C-suite claims much higher time savings from AI than workers, latter report far less

> workers feel overwhelmed integrating AI, report wrong outputs, & often spend saved time fixing errors

> most usage limited to Google-search replacement & draft generation, far less for data analysis or coding

> major friction is uncertainty over what AI does well vs poorly

> PwC survey (4.5K CEOs): only 1/3 see revenue gains, 1/4 see cost savings, majority see no clear financial impact yet

> among companies that did pursue automation, Duolingo & Klarna both backtracked on replacing humans with AI after failed attempts

> WSJ: skepticism driven by job-loss fears & lack of AI know-how, training + trust needed for productivity gains

> a year ago, McKinsey found employees 3× ahead of CEOs in AI use, now leadership expectations overtaken worker reality