Can Deep Tech Propel Europe to Autonomy From the US?
Amid growing geopolitical tensions and economic volatility, the question of Europe’s future independence—especially from the United States—has become more pressing. A new comprehensive report suggests that deep tech, a sector focused on advanced scientific and engineering innovations, could be the key to strengthening Europe’s security, defense, and technological autonomy, providing an alternative to reliance on the U.S.
However, experts caution that Europe’s deep tech ecosystem still faces significant challenges. Lukas Leitner, a deep tech investor at Lakestar, highlighted that while the U.S. enjoys a “flywheel effect” in deep tech, Europe is still catching up. “We have a flywheel in the ‘shallow’ tech scene, with companies founded by second-time founders from platforms like Revolut. But the deep tech scene is not yet there,” he noted. Europe’s potential lies in its research institutions, engineering talent, and public support for deep tech, but there is a need for a more supportive policy framework to foster risk-taking and entrepreneurial growth.
Arnaud de la Tour, CEO of Hello Tomorrow, pointed to a recent breakthrough as evidence that Europe is no longer trailing in AI. The emergence of open-source AI platform DeepSeek, he argued, illustrates the region’s potential in the field. He added that many talented AI professionals are considering returning to Europe due to shifting geopolitical dynamics. “We have great AI talent… but we definitely need the right policy framework to unlock our potential,” he said.
Europe’s relative weakness in computing power compared to the U.S. is often cited as a disadvantage. Yet, Leitner believes Europe’s strengths in photonics computing—utilizing light for more efficient processing—could offset this gap. “We’re really good in Europe with photonics, because we have good laser systems and fundamental research in this area,” he stated, emphasizing the region's unique edge in these emerging technologies.
Additionally, Europe may benefit from a brain drain in the U.S., spurred by cuts to science funding under the Trump administration. The National Science Foundation, once the largest supporter of applied research in the U.S., has seen its budget slashed by half, leaving many scientists without jobs. As a result, de la Tour sees an opportunity for Europe to attract these skilled professionals, strengthening its own deep tech ecosystem.
The potential for deep tech in Europe is evident, with the sector attracting €15 billion ($16.3 billion) in venture investments in 2024. According to a report co-authored by venture firms Lakestar, Walden Catalyst, Dealroom, and the deep tech conference Hello Tomorrow, nearly one-third of all venture capital in Europe now flows into deep tech. Despite this growth, the report also reveals that many European deep tech startups still rely on the U.S. for exits, and half of the capital they raise comes from outside the continent.
Yet, deep tech is also seen as a potential counterbalance to the trend of “momentum investing,” which tends to favor faster, less risky startups. The report suggests that, while the sector faces significant hurdles, it could be key to Europe’s long-term resilience, offering a pathway toward technological independence and greater economic security.
Lukas Leitner, one of the report’s co-authors, echoed the sentiment that despite the challenges posed by geopolitical tensions, Europe must seize the opportunity to build its deep tech capabilities. “Deep tech could be the key that unlocks future resilience for the continent,” he said, underscoring the crucial role of innovation in shaping Europe’s future in an increasingly unpredictable world.