The strategic choice of the government in AI innovation

The Dutch Model of Laying Foundations

The Dutch approach, rooted in a philosophy of building a sustainable, widely accessible infrastructure, is increasingly bearing fruit. It goes beyond merely providing facilities; it creates a culture of collaboration and applied innovation. This is evident in practice.

A striking example is longform.ai, a spin-off from the University of Amsterdam that emerged in 2024 within the ICAI Discovery Lab [7]. This startup, which develops an AI platform for audio analysis, directly raised seed funding from the Innovation Fund Noord-Holland. It exemplifies how the infrastructure of public-private labs directly leads to commercially viable and fundable companies.

This approach is not limited to software. The Dutch "meta-tech" mentality - not making the chips, but the machines that make the chips - is also visible in AI. Companies like QuantWare (quantum computing) and Fizyr (robotic vision) build complex systems that integrate AI. They benefit from the close collaboration between technical universities, the government, and specialized investors, a dynamic reinforced by platforms like Techleap and the Dutch AI Coalition [8].

The French Model of Forging Champions

France opts for a significantly different, more interventionist strategy. Since 2018, the French government has pledged more than €2.5 billion to an ambitious AI plan, aimed at creating European leaders [5]. This policy combines investments in infrastructure with highly targeted, direct support for promising startups.

The most prominent example is Mistral AI. Although the French state is a significant indirect shareholder through public funds, the recent funding round of €1.7 billion was led by private parties, with the Dutch ASML as the largest investor with a contribution of €1.3 billion. This approach has yielded clear results. In 2024, French AI startups raised €1.9 billion and the country became the most popular destination in Europe for foreign AI investments [5].

The Innovation Path for Startups and Scale-Ups

For entrepreneurs, the government's choice makes a world of difference. The Dutch approach offers fertile ground for early innovation, while the French route can be a quicker path to the top for a select group.

For the Early-Stage Startup in the Netherlands The infrastructure model is a blessing. A nascent company can leverage the following benefits.

• Validate without large capital investment. Access to the computing power of the AI Factory or the expertise of an ICAI lab lowers the threshold for testing complex models.

• Attract talent. The close ties with universities through ICAI create a constant stream of highly educated PhDs and graduates.

• Collaborate on R&D. Participation in an ICAI lab offers the opportunity to work with academics and larger companies on fundamental breakthroughs.

For the Scale-Up in the Netherlands Here, the challenge becomes greater. Once a company has moved beyond the fundamental research phase and needs to scale up, the Dutch model offers less direct support. The strategic choice is as follows.

• Seek international partners. The investment of the Dutch ASML in the French Mistral AI is a perfect example. Scale-ups must proactively seek European capital and strategic partnerships.

• Focus on a profitable niche. Instead of competing on sheer scale, Dutch scale-ups can target highly specialized, profitable B2B markets where their technological edge makes the difference.

Sources: ICAI.ai [3], Business France [5], IO+ [2]

The Way Forward from Foundation to World Player

The Netherlands has laid a strong and fertile foundation with its infrastructure model. The next step is not to replace this model, but to complete it. The challenge now is to build strategically on this foundation, so that the successes of tomorrow not only sprout here but also grow into global players. There are concrete opportunities for startups.

1. AI for the Energy Transition The Netherlands faces a huge challenge in the energy transition. Startups like Dexter Energy, which uses €23 million in funding to leverage AI in predicting and optimizing energy flows, show that there is a huge market here [9]. The combination of a strong energy infrastructure and AI knowledge is a unique asset.

2. AI in the ‘Old’ Economy The strength of the Dutch economy lies in sectors such as logistics, agriculture, and the maritime industry. Startups that apply AI to optimize processes in these sectors have a direct competitive advantage. They solve real problems for a capital-strong market eager for efficiency.

3. Deep Tech and System Integration Building on the ‘meta-tech’ mentality, there are opportunities in the complex integration of AI with other advanced technologies such as quantum computing and photonics. This is not a market for quick profit, but a domain where the Netherlands, with its patient and collaborative approach, can build a sustainable advantage.

To capitalize on these opportunities, an evolution in government policy is desirable. In addition to maintaining the infrastructure, a next step could be to show more strategic boldness, following the French model. This could be done through co-investment funds specifically aimed at the scale-up phase, bridging the gap between early innovation and the large, international capital market. This way, the fertile ground is not only used to sow, but also to harvest the most promising crops.

Max Pinas
Founder Dutchstartup.ai & studio hyra