I've read it like this: They differentiate themselves from OpenAI/Anthropic/other major players by being in the EU and (more) open-source; they differentiate themselves from other European competitors by being as good as OpenAI.
I think it's a fine proposition given the early market and their team, as long as this hypothesis holds true for years to come,
> we believe that most of the value in the emerging generative AI market will be located in the hard-to-make technology, i.e. the generative models themselves,
If you read the memo carefully, they do claim to be open-source at the beginning, but then switch to explaining that they will make money off closed-source models for their customers.
So, not more open-source than what OpenAI is doing.
Ok, so they're aiming for a more "spray & pray" kind of GTM, challenging the incumbents based on the premise that it'll be EU based.
This basically then boils down to: "ChatGPT got x users in a week, and we want to do the same for EU.", without a clear path to profitability or guarantees.
So it's effectively a humongously risky bet by EU VCs?
I think that the investors are mainly betting on the team expertise to train models as good as the one of OpenAI but with an open source approach (the main differentiator), which according to the founders would open up a bigger market opportunity for them.
> So it's effectively a humongously risky bet by EU VCs?
isn't it supposed to be VCs job to bet on risk proposition with the hope of a 100x return?
VCs keep lecturing candidates on making sure that they have paying customers on the radar from day one, so no, that does not look like a reasonable VC bet.
> we believe that most of the value in the emerging generative AI market will be located in the hard-to-make technology, i.e. the generative models themselves,
and they truly can compete with market leaders.