Data from AI benchmarking platform Evident has revealed a notable trend: European banks are increasingly driving investment in AI startups. Despite a downturn in overall venture capital activity, European banks took the lead in AI investments, with French bank BNP Paribas emerging as a prominent player in this sector.

According to Evident’s latest Dispatch, the world’s largest banks collectively made 92 new investments in AI startups in 2023. While this represented a 37% decline from the previous year, European banks accounted for a significant portion, contributing to 45% of the industry’s AI investments – the highest share recorded for the region.

Notably, BNP Paribas, a top European bank, played a pivotal role in this surge, ranking 3rd overall in terms of deal flow. BNP Paribas’s investments have notably fuelled Mistral AI, Europe’s largest competitor to Open AI, signalling the bank’s commitment to innovation in artificial intelligence.

The Dispatch also highlighted the broader trend of increased venture investments into AI startups by leading banks over the past decade. Nearly all banks tracked in the Evident AI Index (96%) have engaged in AI-related startup investments since 2010, with a total of over 800 such investments recorded.

Despite a slight decline in overall deal flow, leading banks like Citigroup, Morgan Stanley, and BNP Paribas maintained their prominence in AI venture activity. Citigroup led the pack, accounting for 13% of all AI-focused investments in 2023, followed closely by Morgan Stanley and BNP Paribas.

Furthermore, the Dispatch underscored the strategic importance of AI investments for banks, beyond purely financial returns. Many banks view such investments as a means to access cutting-edge AI technologies, market intelligence, and expertise, thereby accelerating their journey towards AI maturity.

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Alexandra Mousavizadeh, Co-Founder and CEO of Evident, emphasised the long-term implications of this trend, noting that European banks are steadily closing the gap with their North American counterparts in AI startup investments. While North American banks have historically dominated this field, the growing share of European banks in AI ventures bodes well for their future AI capabilities.

Overall, the data from Evident’s Dispatch provides insights into the evolving landscape of AI investments by banks, with BNP Paribas at the forefront of European initiatives in this domain.