Why global investors are flocking to the region
Investing in Artificial Intelligence (AI) in Central and Eastern Europe (CEE) has become increasingly popular among international investors. The region’s robust ecosystem and resilience in the face of challenging global economic conditions have attracted significant attention. In 2023, over €850 million was raised by AI startups in CEE, with an additional €593 million raised in the first eight months of 2024. Countries like Poland, Greece, and Croatia have emerged as leaders in AI investment, with companies like Verne in Croatia and ElevenLabs in Poland securing substantial funding.
Poland, in particular, has been a frontrunner in fundraising, with firms raising €171 million in 2024 alone. The entrepreneurial spirit, technical expertise, and rapidly evolving digital infrastructure in the region have made it a desirable destination for investors. Despite global economic downturns, CEE has demonstrated its ability to attract capital and showcase resilience in the face of economic challenges.
Investors are focusing on high-impact industries where CEE businesses excel, rather than simply investing in AI in general. Key sectors driving AI investment in CEE include biotech and healthcare, fintech and digital banking, industrial automation and manufacturing, and cybersecurity. Startups like Causaly in Greece, FintechOS in Romania, Gideon in Croatia, and SEON in Hungary are revolutionizing their respective industries with AI-powered solutions.
One significant factor contributing to the success of CEE startups is the growth of vertical AI solutions tailored to specific industries. Companies like Creatopy, ElevenLabs, and Colossyan are pioneering AI-driven innovations in areas like video production, enabling CEE firms to compete globally with their specialized offerings.
Smart regulation, such as the EU AI Act implemented in 2024, has also played a crucial role in creating an investment-friendly environment in CEE. Clear legislative frameworks that address ethical AI development and reduce investment risks have bolstered investor confidence in the region. Additionally, CEE’s cost efficiency, attractive valuations, and government support for digital skills and AI education have further enhanced its appeal to investors.
Looking ahead to the future, CEE is well-positioned for sustained success in AI investments. Trends such as growth in late-stage investments, the emergence of more AI unicorns, and strategic acquisitions and global expansion indicate a promising outlook for the region. With careful planning and continued investment, CEE has the potential to compete with established AI hubs and attract high-growth opportunities in the AI sector.
In conclusion, CEE has become a key player in the global AI investment landscape due to its exceptional talent pool, cost-effective operations, government support, and favorable regulatory environment. While challenges like a shortage of skilled personnel and limited exit options need to be addressed, CEE presents a wealth of opportunities for investors seeking high-growth AI prospects. The region’s AI investment boom signifies the beginning of a promising future for AI innovation in CEE.
