Investment Summit Reveals Shifting Priorities in AI and Defense

A major European investment summit last week brought together venture capitalists, limited partners, and startup founders to discuss current market trends. Three topics dominated conversations: artificial intelligence, defense technology, and how European and American venture markets compare.

Investors reported that European AI startups at seed and pre-seed stages are negotiating better deal terms than before. Founders now give up only 10 to 15 percent equity in early rounds. This represents a drop from the historical 15 to 20 percent norm. Founders currently hold more negotiating power than usual. Participants warned that rising valuations without real growth could trigger corrections later.

New defense and dual-use technology funds are launching rapidly across Europe. Industry observers described this as reverse vintage diversification because too many funds are chasing identical themes at once.

Geopolitical tensions and rising government budgets provide strong momentum for the sector. However, investors flagged serious obstacles, including slow procurement cycles, extended exit timelines, regulatory hurdles, and challenges in scaling across borders.

American and European investors debated their contrasting approaches at the gathering. Attendees from the U.S. stated they prioritize building big companies with access to large capital and flexible legal frameworks over geographic origin.

European investors argued that unlocking institutional money like pension funds matters more than fixating on legal structures. Both sides agreed that Europe possesses talent and startups but lacks the capital scale and exit history that America enjoys.

The summit highlighted a moment where AI, defense, and global capital collide. Founders and funds enjoy strong momentum but also confront risks from hype, crowded markets, and structural barriers. Participants captured the prevailing sentiment as excited but cautious about the path ahead.