LONDON, May 20 (Reuters) - France will this week host tech executives and political figures including former U.S. secretary of state John Kerry, EU industrial chief Thierry Breton and ex-Google boss Eric Schmidt as it looks to assert Paris' role as an AI hub.

The "Viva Technology" conference will put French innovators front-and-centre as attendees tackle key questions around artificial intelligence (AI), including its potential impact on upcoming elections and climate change.

Paris-based LVMH, the world's largest luxury group, has also thrown its weight behind VivaTech as a founding partner of the event.

Its Chairman and CEO Bernard Arnault – one of the world's wealthiest individuals - is expected to draw crowds during his visit to the group's sprawling stand, featuring new tech from prestigious brands like Louis Vuitton, Tag Heuer and Dior.

Over the past 18 months, France has attempted to build a reputation as a leader in generative AI, the technology behind OpenAI's ChatGPT and similar tools, striving to attract new startup launches.

President Emmanuel Macron has drawn investments from American big tech companies like Amazon and Microsoft , while trying to revive EU plans to better integrate capital markets across the continent. He hopes that will help to raise the capital needed to nurture emerging AI companies.

Paris' status as the global capital of luxury can help it attract investment in technology as well, organizers say.

"Luxury is always linked with innovation, because your aim is always to provide something no-one else can provide," said Francois Bitouzet, managing director of VivaTech, who cited Britain's exit from the EU as a factor in France's growth.

Paris has ranked second-place to London in terms of tech investment but there are signs of change, Bitouzet added.

"The ecosystem in Paris is very dynamic, and there has been a lot of investment here in the past few years," he said.

Investors pumped close to $8 billion into French tech companies in 2023, behind Britain ($13 billion) but ahead of third-place Germany ($7 billion), according to a recent report from venture capital firm Atomico.

While Paris may not immediately challenge London for the top spot, tech startups have been popping up in France at a faster rate than anywhere else in Europe, with close to 3,000 founded in 2023, according to Atomico.

A similar number set up shop in Britain over the same period, but the number of new companies founded there each year has been in decline since 2020.


In the 18 months since ChatGPT sparked the generative AI craze, some of the most lucrative fundraising rounds have been raised by Paris-based companies.

Some of Paris' buzziest companies were founded by former researchers at industry stalwarts like Google DeepMind , such as Mistral AI and Holistic AI.

Last September, Julien Launay quit his job at Hugging Face, a leading French-American AI firm, to launch his own startup, Adaptive ML, which helps other companies build their own generative AI tools, and has staff in Paris and New York.

The company raised $20 million less than six months later, in a round led by California-based ICONIQ Capital and Index Ventures, which has headquarters in both London and San Francisco.

"ICONIQ and Index were the two major investors, but if you look at the smaller ones we tried to get a lot of French backers on board because we thought that was a good move," Launay said. "France has a lot of talent, and a lot of startups but in terms of funds, there's still quite a bit less than the U.S."

European startups have historically found it difficult to raise the large amounts of capital desired from local investors. While the EU offers a huge single market for goods and services, capital markets in all 27 member states come with a maze of different securities laws, taxes and accounting – resulting in higher compliance costs and less liquid markets.

"The most important thing is that these companies get funding, said Hannah Seal, partner at Index. "What is important is that these companies feel like they can continue to find and recruit the talent to build giants in Europe and we see that is increasingly the case." (Reporting by Martin Coulter; additional reporting by Mimosa Spencer; Editing by Matt Scuffham and Susan Fenton)