AI startups: Germany’s chance to become a formative hotspot

hubraum and German Startups Association present study on AI ecosystem in Germany.

Central topics of the study:

  • – Innovation needs trust: Startups in the stress field between responsibility and European regulation. 
  • – More transfer and cooperation: Opportunities and development perspectives for the German AI ecosystem at the interface of startups, research and industry.
  • – New unicorns from Germany: many AI startups want to become big players.

Artificial intelligence (AI) is the key technology of digitalization. Startups play a central role in this: for 43% of these innovative growth companies, AI has a clear impact on their business model – they are also pioneers in future fields such as Industry 4.0 and Internet of Things. Whether in medicine, industry or autonomous driving, startups are putting AI into practice.

Five key findings of the study:

1. Great potential is not being leveraged: Young AI companies are hugely ambitious – 17% aim for a Unicorn rating. At the same time, there is a lack of growth momentum and resources: In comparison, 10 times more is invested per capita in AI startups in the U.S., and as much as 19 times more in Israel.

2. Women severely underrepresented: The share of female founders in the AI sector is only 12%, clearly below the average in the startup ecosystem (18%). The picture is similar for female employees (29 vs. 38%). This imbalance must change, especially with a view to talent and the development of participatory and unbiased AI. 

3. AI with responsibility: 81% of AI startups believe that ethical issues must be taken into account in the development of the technology. There is thus a basic consensus among German AI startups on the need to take responsibility themselves here. 47% confirm that European AI regulation can create trust and become a unique selling point. In this context, greater attention must be paid to legal uncertainties and practical feasibility.

4. Research transfer is elementary: With a share of 33%, university and research-related AI startups already play an important role, but there is still a great need to catch up in research transfer – AI-specific courses of study and practice-oriented start-up support can be decisive levers.

5. AI needs data: In terms of value creation by AI startups, the greatest potential in Germany lies in industrial applications. In this context, company data is key, and the exchange of this data has been too infrequent to date. 64% of AI startups call for better access.

With the presented study on AI startups in Germany, hubraum, the tech incubator of Deutsche Telekom and the Bundesverband Deutsche Startups (German Startups Association) show where the potential and unique selling points of the German AI ecosystem lie. Germany and Europe have the opportunity to become a defining AI hotspot at the intersection of innovation and responsibility. But this can only succeed if the framework conditions are right.

Franziska Teubert, Managing Director German Startups Association:

“Our study clearly shows how important startups are when it comes to bringing AI applications into practice. For 43% of our startups, technology already plays a central role – they are thus key innovation drivers and at the same time want to take responsibility. In addition to capitalization, we urgently need to do better in the AI sector when it comes to the proportion of women. We need significantly more female AI founders and Women in Tech.”

Axel Menneking, Head hubraum:

“German companies have a lot of catching up to do in harnessing the enormous potential of AI startups for themselves. Deutsche Telekom successfully uses AI in network management and customer service, among other things. Cooperation at eye level and intensive exchange, but of course also financial support, are essential here. As a tech incubator, hubraum supports AI startups with funding and development partnerships. In this way, Telekom benefits from the innovative power and new applications for its customers.”

Here you can download the study “Startups and Artificial Intelligence – Innovation meets Responsibility”:

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