European chip startups are aggressively pursuing large funding rounds as the artificial intelligence (AI) boom intensifies competition with Nvidia, the current leader in AI graphics processing units (GPUs) [1]. Dutch company Euclyd, founded in 2024 by former ASML director Bernardo Kastrup and advised by ex-ASML CEO Peter Wennink, is seeking at least 100 million euros ($118 million) in new funding to scale its technology and begin supplying its first customers [1]. Euclyd claims its AI chips can deliver 100x higher power efficiency for inference compared to Nvidia's latest generation Vera Rubin chips, although these claims have not yet been proven in commercial deployments [1]. Nvidia did not respond to CNBC's request for comment [1].
Other European startups are also joining the funding race: U.K. startup Optalysys plans a $100 million-plus fundraise later in 2026, while British company Fractile and France's Arago are reportedly seeking nine-figure rounds. Fractile declined to comment and Arago did not respond to requests for comment [1]. Investors have already poured more than $200 million into the Netherlands' Axelera and the U.K.'s Olix in 2026 [1].
The market is shifting focus from training AI models to inference, which is now considered dominant. Patrick Schneider-Sikorsky, director at the Nato Innovation Fund (NIF) and investor in Fractile, highlighted that geopolitical factors such as U.S. export controls, concentration risk around TSMC, and the European sovereign compute imperative are driving capital toward homegrown silicon solutions [1]. Euclyd's chips aim to process data in multiple places, increasing efficiency for AI inference and reducing energy, cost, and footprint in AI data center infrastructure [1].
Despite the ambitious claims and significant investor interest, Euclyd's systems have not yet been proven at scale with commercial partners, and the company is actively working to achieve this milestone [1].
CONCLUSION
European AI chip startups are attracting substantial investment as they seek to challenge Nvidia's dominance in the inference market. Euclyd and others are promising major efficiency gains, but their technologies remain unproven at scale. The influx of capital and geopolitical tailwinds suggest a high-impact shift toward European semiconductor innovation.