Sonali De Rycker, general partner at Accel and one of Europe’s leading venture capitalists, is urging policymakers to avoid overregulating artificial intelligence (AI) as the continent navigates a pivotal moment in tech innovation.
Speaking at a TechCrunch StrictlyVC event in London this week, De Rycker said Europe has all the building blocks for global AI leadership—entrepreneurial talent, world-class universities, and ample capital. However, she warned that fragmented regulations and rigid compliance rules could throttle early-stage innovation before it scales.
“We’ve got everything in place, but we haven’t unleashed it,” she said. “The regulatory headwinds are real.”
A Balancing Act: Innovation vs. Control
At the center of concern is the EU’s Artificial Intelligence Act, which imposes strict obligations on “high-risk” AI applications in industries like healthcare and finance. De Rycker acknowledged the importance of safeguards, but emphasized that excessive or broadly defined rules could drive innovators away or slow progress.
“Ethics and safety matter,” she said. “But we can’t afford to bind the very startups we’re counting on to grow the economy.”
A Supercycle Europe Can’t Miss
De Rycker sees the current surge in AI innovation as a rare opportunity—what she called a “supercycle”—and warned that Europe must move fast or risk losing out to faster-moving regions, particularly the U.S. and China.
The urgency is compounded by geopolitical shifts, including weakened U.S. engagement with Europe under the current Trump administration. That, De Rycker argues, makes self-reliance more essential than ever.
“Europe has to bet on itself,” she said. “We need to become sovereign, not just politically, but economically and technologically.”
Fragmentation Still Slowing Startups
Europe’s lack of a unified regulatory and legal framework continues to create friction for founders, De Rycker said. She highlighted the need for a harmonized business environment—such as the proposed “28th regime”—that would simplify operations across the continent.
“If we acted like one region, we’d be a force,” she said. “Instead, we’re still bogged down in differences that slow everyone.”
Accel’s Strategy: Applications Over Infrastructure
Accel, which has backed over 70 companies across Europe and Israel, has taken a practical approach to AI investing, focusing on application-level companies rather than foundational model developers like OpenAI or Anthropic.
“Training models is capital intensive and not a venture-fit model,” De Rycker explained.
Some of Accel’s standout bets include:
- Synthesia, a synthetic video platform used in enterprise training
- Speak, a language learning app that recently hit a $1B valuation
She likened the moment to the early days of mobile apps, saying the AI boom is expanding markets and creating entirely new behavior patterns.
“Uber and DoorDash weren’t just mobile sites—they were new paradigms. AI is doing the same now.”
Looking Forward
Despite regulation concerns, De Rycker remains optimistic. Cities like Zurich, Munich, London, and Paris are now building self-sustaining ecosystems of talent and capital, similar to what made Silicon Valley thrive.
When asked how European founders can better compete with their U.S. peers, her response was clear:
“They already are,” she said, citing Accel-backed successes like Supercell and Spotify. “There’s no difference in ambition.”
Conclusion:
With the AI era accelerating, Europe stands at a crossroads. How it navigates the tension between regulation and innovation may define its place in the global tech landscape for decades. As De Rycker put it:
“These cycles don’t come often. We can’t afford to be leashed.”
