Anyone who attends a tech summit in 2024 can expect to be confronted with artificial intelligence (AI) every which way they turn. In that sense Web Summit, Europe’s largest tech conference annually held in Lisbon, Portugal was no different.

But for the 70,000 plus crowd of visitors, startups, investors and executives passing through the halls in Lisbon’s International Fair, another topic was floating through the air — what exactly will Donald Trump’s second term mean for the tech industry, particularly in Europe?

A couple of panels tackled the geopolitical question head on, with titles such as “A new Trump era” and “EU, the ball is in your court.”

Among attendees with an interest in the European startup sector, there is agreement that Europe needs to recognize this seismic change, and quickly.

Growing gap between US and EU?

“I think we don’t know yet what it will mean, but I think everyone is very alert,” says Anne Christin Braun, head of Digital Health and Marketing at German tech incubator ZOLLHOF. “Everybody is trying to understand what it could mean and to future-proof their opportunities,” she told DW.

Even as Donald Trump’s cabinet starts to take shape, it’s still not clear what his approach to the sector will be. His appointment of Tesla CEO Elon Musk to a newly created cabinet position has led to suggestions that Big Tech’s concerns will be extremely close to the heart of power.

Combined with Trump’s “America First” economic policy, this could mean a broadening gap between the US and EU on key tech issues, such as the regulations surrounding the use of AI, which will ultimately define what many startups are able to do.

American tech giants, including Google and OpenAI, own almost all of the large language models on which the vast majority of AI startups base their applications.

Antoine Jardin, CTO of French startup Arlequin.AI, which provides AI-driven social-data analysis, thinks the US election will have major consequences for the sector.

“The US will try to separate itself from the rest of the AI development across the world,” he told DW. “What happened in the US over the past week has proved that the market has transformed a little bit and every area needs to develop its own [tech] ecosystem.”

AI regulation could provide confidence

There is still quiet confidence among many that Europe can succeed in that regard.

For Braun, the EU’s protections around the use of AI, now enshrined in the so-called AI Act, provide a chance for European tech startups to take the lead in artificial intelligence that people feel safe using. “Our chance in Europe with data security and data protection is really developing trustworthy AI, but doing that in a way that the economy benefits from it.”

It’s a point also made by AI investor Andreas Urbanski. “I personally think that [the EU AI Act] is a great starting point in the right direction,” he told DW, adding that there was definitely a need for “smart regulation.”

“Startups that say there’s not enough innovation in Europe because of the AI Act, I think that is a very selfish statement,” he said.

At the same time, startups are keen to see Europe keep an open approach to other markets other than the US, allowing them to seek opportunities elsewhere.

“For us in the sustainability business, [the election] is not a positive change, because we know how Trump positions himself on the climate,” said Paula Gonzalez, CEO and co-founder of Sustanya, a Portuguese startup that helps small businesses to collect and publish their sustainability information.

“But companies in Europe and around the world are committed to sustainability and I think Europe is actually positioning quite well to access other markets. Latin America and Africa, for example.”

Arlequin.AI’s Jardin makes the same point, saying that it’s very important that “Europe engages with other areas of the world.”

Lack of capital hurting European tech

However, there is widespread acceptance that American competitors have a big advantage when it comes to winning investors’ cash.

According to figures from venture capital firm Atomico, capital invested in European tech stood at $45 billion (€42.6 billion) in 2023, compared to $120 billion in the US.

If Trump’s election really does mean Europe needs a stronger ecosystem, startups are going to need the money to build it.

“The only thing is that attracting capital in the States and Europe is very different. In the States the amount of money that is available is much higher. Now it’s a bit of a game of ‘go big or die,’ so it’s a bit tricky, but I’m quite positive,” said Gonzalez.

Yet that same question of access to capital has led Nelson Ajulo, an entrepreneur and CEO of Dutch operational platform startup Joble, to look at moving to the US soon.

“In the US you have investors who are willing to give you what you actually need to scale your organization,” he told DW. “And they’re not thinking small, they’re thinking big.”

For the moment, he also sees Trump’s election as an advantage for the US because he can imagine the business landscape there to become “more favorable” with Trump the businessman.

“You can see the stock market is really going up now. It’s the ripple effect. If the stock goes up, investors have more return in their pockets, it also means there is more money for investment,” he said, The market trajectory “seems very hopeful.”

Already looking ahead to 2025, signs around the Web Summit and in the event app are advertising tickets for next November. Artificial intelligence will undoubtedly still be the talk of the town.

European startups will be hoping that US politics, and their effects on the industry, are small enough to remain in the background.

Edited by: Uwe Hessler