European private equity shifts toward later-stage AI deals

European private equity is moving into late-stage AI financing as investors concentrate capital in fewer, larger companies rather than broad early-stage bets. European venture funding reached $17.6 billion in the first quarter, up nearly 30% year-over-year, while deal volume fell 40% year-over-year. Late-stage funding moved in the opposite direction, with $9.2 billion deployed across just 83 deals, up 91% by value.

EU private equity investment in local AI companies reached $6.8 billion in 2025, reflecting an effort to close a long-standing gap in growth capital for AI scale-ups. The European Commission’s €5 billion Scaleup Europe Fund, managed by EQT, is designed to provide capital from Series B onward and test whether publicly backed money can be deployed with private equity discipline.

Mistral has become the central test case. The company is reportedly seeking around €3 billion at a roughly €20 billion valuation, after reaching €11.7 billion months earlier, and raised $830 million from European banks to finance a Paris data centre. The next signal will be EQT’s first fund deployments this autumn, which could shape whether Europe’s leading AI companies rely more on local capital or continue turning to American investors.