Why Brussels Can No Longer Afford to Exclude London from the Technology Battle

When the United Kingdom left the European Union, Brussels and London long framed the separation as a largely commercial and regulatory adjustment. But six years later, technological reality tells a very different story. In artificial intelligence, quantum computing, biotechnology and semiconductors, Europe is gradually discovering that it no longer has the geopolitical luxury of further fragmenting its own ecosystem.

The possible return of the United Kingdom to the European startup investment fund linked to Horizon Europe marks a discreet yet revealing turning point. According to the Financial Times, London could join a €4 billion European investment mechanism dedicated to technology startups. On the surface, the matter may appear technical. In reality, it reflects a much deeper doctrinal shift: Brussels is beginning to recognize that European technological sovereignty without London is becoming economically difficult to sustain.

Despite Brexit, the United Kingdom remains Europe’s leading venture capital hub. In 2025, British startups raised approximately $23 billion, more than France and Germany combined during certain periods according to Dealroom industry data. London alone concentrates a significant share of European funds specialized in AI, fintech and deeptech.

More importantly, the country continues to produce some of the continent’s most strategic technology assets. DeepMind remains one of the world’s most influential artificial intelligence laboratories. Arm Holdings continues to occupy a central position in the global semiconductor industry, with architectures powering the vast majority of smartphones and increasingly AI servers. Wayve recently raised more than $1 billion from SoftBank Group, NVIDIA and Microsoft to develop autonomous driving models. Synthesia has become one of Europe’s leading symbols of enterprise generative AI. Quantexa is establishing itself in analytical infrastructure for banks and governments.

In other words, London remains one of the few places in Europe where fundamental research, capital, international talent and technological scaleups converge simultaneously.

For Brussels, the issue is becoming industrial before it is political. In AI, financing requirements are changing dramatically in scale. Training models, building computing infrastructure, funding data centers and developing quantum technologies now require capital volumes comparable to those of energy or telecommunications infrastructure.

Europe already suffers from a structural late-stage financing deficit. According to Atomico, European startups account for roughly 14% of global venture capital funding, compared with nearly 52% for the United States. More critically, the gap widens sharply for rounds above €100 million, precisely the scale required to transform deeptech startups into industrial leaders.

This weakness is pushing many European companies toward American capital. Mistral AI has welcomed major U.S. investors such as Andreessen Horowitz and Lightspeed Venture Partners. The same pattern can be seen at Helsing, now valued in the billions of euros in the AI defense sector with backing from international funds.

Brussels is therefore attempting to avoid a double scenario: European startups seeking financing in the United States, while the United Kingdom becomes a technology platform even more integrated with American capital than with the continental market.

The British return to mechanisms connected to Horizon Europe directly addresses this concern.

The program itself has become strategic. With a budget of €96 billion for its current cycle, Horizon Europe is one of the few European instruments capable of connecting universities, laboratories, startups and industrialization. Brussels now wants to go further. The European Commission is working on a “Scaleup Europe Fund” intended to become Europe’s largest technology fund, with a combined target of up to €6 billion in public and private capital.

The objective is to prevent European deeptech startups from leaving the continent once they reach industrial growth phases.

Value leakage has become a central concern. Graphcore, once presented as Britain’s answer to NVIDIA in AI semiconductors, faced major difficulties before being acquired by foreign actors. Darktrace was ultimately acquired by the American private equity firm Thoma Bravo. DeepMind has belonged to Google for more than a decade.

This dynamic is fueling growing anxiety in Brussels: Europe knows how to produce research, but is far less capable of turning that research into independent technology giants.

Against this backdrop, maintaining an artificial border between London and the rest of the continent is becoming increasingly counterproductive. Keir Starmer’s government itself appears to be moving toward a more pragmatic rapprochement. The United Kingdom officially rejoined Horizon Europe in 2024 after years of post-Brexit tensions. According to figures cited by the Financial Times, the country already received more than €1.7 billion from the program during 2024, ranking fifth among participating nations.

The signal is significant. European digital sovereignty was initially conceived primarily through regulation: DMA, DSA, the AI Act, data protection and competition policy. Brussels now understands that technological power depends just as much on financial, scientific and industrial infrastructure.

And on that front, the long-term exclusion of Europe’s principal financial hub is becoming increasingly difficult to justify.

The paradox is even more striking given that, at the very moment the United States is consolidating its dominance around a handful of giant platforms and China is massively organizing its technological capital, Europe is only beginning to rebuild its own industrial continuity.