Octave Klaba recently testified before the French National Assembly, and what is particularly interesting is the vision of the OVHcloud founder. True to himself, with the frankness he has always possessed, he doesn’t mince his words. He speaks plainly and draws a conclusion that is, at its core, clear and evident regarding the progress of the European AI industry, the lack of political courage, the absurdity of our administrations, and the excesses of investors. And on many points, he hits the nail on the head.
The Toxic Fascination of Investors and the Mirage of the « Start-up Nation »
« The financial culture in Europe is very much focused on: ‘I invest, I lose money.’ »
— Octave Klaba
Regarding financing, for example, Octave Klaba hits where it hurts by pointing out the absurd divide in our financial culture. He rightly denounces two extremes that are eroding Europe: on one side, short-term investors who swear only by dividends; on the other, this famous ‘Start-up Nation’ culture where funds are raised almost solely to burn capital, without managing to find a sustainable business model.
And I must admit that without being an insider in investment funds, I rather share this impression. We see a huge amount of money injected into companies that fail to achieve profitability.
We finance at a loss, undoubtedly blinded by the dazzling success of certain American ‘new tech’ companies, too often fostering the hope of an easy return on investment. The result? Surel a lot of wasted money.
The 10-Billion-Euro European Paradox and the 15% Rule
« The money, the money is already there. It simply lacks a little courage for this money to go to European players. »
— Octave Klaba
The second point highlights the complete contradiction of our institutions. European entities massively invest in and purchase products and services from the United States, whereas they could equip themselves in Europe, in France, and with OVH, of course. To illustrate this absurdity, Klaba recalls a staggering reality: the European Commission alone spends 1.2 billion euros annually with AWS and 500 million with Microsoft Azure.
He puts forward a global figure that summarizes everything: 10 billion public euros go to Americans each year at the EU level. So yes, 10 billion compared to the overall American business is not much. But for Europe, it’s huge!
And that’s where his argument hits home: he absolutely does not ask for new public budgets to be created. His solution is basic: redirect 5%, 10%, or 15% of this existing public procurement towards our local suppliers to give them the ‘critical mass’ essential for investment. As he perfectly summarizes, we don’t need subsidies; we just need a little political courage.
Giga Factories and Data Centers: We Have Fallen into the Opposite Extreme
« The mere act of submitting a file blocks any investment on a site for 2 years… I challenge you to manage a business with that. »
— Octave Klaba
The matter of infrastructure is, here, an extremely sensitive and complex subject. Octave Klaba states it unequivocally: there will never be ‘Giga Factories’ of data centers (these immense factories of more than 1 Gigawatt of energy for AI) in France or in Europe. Why? Because of the exorbitant processing times (4 to 5 years) and the burden of environmental regulations, particularly ICPE standards.
All of this is undoubtedly the result of both a culture of prudence exacerbated by certain industrial excesses of the 20th century, and an enormous fear on the part of the general public, widely relayed by politicians. But this apprehension is, in my opinion, undoubtedly influenced by a vision of an American model that is not very concerned with the protection of its citizens. It’s a good thing that we protect ourselves in Europe, but haven’t we fallen into the opposite extreme? This is the bureaucratic hell that the head of OVH describes: it’s impossible to have agility when the slightest request for site expansion freezes all activity for two years!
There is a clamor, a general negative buzz, which leads people to systematically oppose constructions, resulting in stifling regulations. This excess of caution means that the European tech and AI industry is falling phenomenally behind.
My Small Challenge to OVHcloud: The Great Oversight of UX
Our companies are probably on the same technological level as American companies. Although. It is here that I make my small challenge to Octave Klaba.
He is undoubtedly right on the substance, but in my opinion, he overlooks an important point: European SaaS and tech companies often lag behind their American counterparts on a very concrete aspect, that of ease of use and quality of service.
As an OVH customer, for example, I have always been struck by the lack of simplicity of certain services, not to mention support that can sometimes become frankly trying.
For me, this is one of the central points of the European problem. And it is undoubtedly, at least in part, linked to a lack of funding. We know how to create good products, sometimes even excellent ones, but many struggle to cross the threshold of internationalisation and scaling up. This is notably due to insufficient investments in customer experience, user experience, design, and quality of service.
Obviously, this observation does not apply to all European startups. But it nevertheless reveals something deeper: a culture of design and user perspective that is still too little present in many European digital products.
Conclusion: Changing Course
This hearing of Octave Klaba has the merit of speaking very frankly and should somewhat awaken politicians and decision-makers. But to conclude with my personal opinion: any strictly national response will be in vain.
To think that we can compete with the billions of Silicon Valley by acting alone in our corner is like trying to cross the Atlantic in a rowboat. I truly believe that we must change our vessel and equip ourselves with powerful European investment funds to implement this strategy at the right scale.
🔗 To Go Further
- Original Video: Octave Klaba’s Hearing at the Economic Affairs Committee of the National Assembly
- On Startup Culture and AI: The Myth of the 3-Person Startup
- On User Culture: Learning to Design Your Interface