The global race for the AI app layer is still on | TechCrunch
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The global race for the AI app layer is still on | TechCrunch
"When we started this report 10 years ago, Europe was one tenth of the U.S.,"
"who really understand how to build great software companies, and that flywheel has been running for 10 years."
"Across every vertical, from legal and healthcare to manufacturing and marketing, we're seeing founders who combine world-class technical talent with a deep market expertise,"
"the potential to become tomorrow's winners in Europe"
The U.S. leads in development of large foundational AI models, while Europe and Israel show strength at the application layer with emerging category leaders such as Lovable and Synthesia. Cloud and AI applications in Europe and Israel attracted 66% as much private funding as U.S. peers in 2025 so far, compared with roughly one-tenth a decade earlier. A maturing ecosystem of founders and investors has increased capacity to build software companies and staff Big Tech AI labs. AI-native applications are achieving $100 million in annual recurring revenue within years and delivering record revenue per head counts.
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