Nearly four in ten European startups would think about moving abroad to grow, says Tanuja Randery, who runs Amazon Web Services (AWS) across Europe, the Middle East and Africa. Among the fastest-growing companies, she told Reuters, it’s more than half.
The complaints behind that number won’t surprise anyone who has tried to scale a company in Europe. Founders say the money isn’t there. Some have told AWS they spend as much as 40 cents of every euro on compliance instead of technology. “Imagine if that was reinvested in technology,” Randery noted.
Europe has spent the better part of a decade trying to grow its own tech champions, so hearing that a big share of its startups have one foot out the door stings. The timing is even worse for AI companies, which usually burn through computing power and capital alike, and they need customers in the U.S. as much as at home.
Still, wanting to leave and actually leaving are two different things. A study published in April by the European Commission’s Joint Research Centre (JRC) found that between 3.3% and 4.3% of European venture-backed startups move their headquarters abroad. Most of those keep operating back home
So the exodus is smaller than the headlines suggest. What Europe stands to lose is harder to spot: a startup can keep its engineers in Lisbon, Berlin or Warsaw and still send its headquarters, its leadership and its investors to the United States. When that happens, much of the value goes with them, even if the European office stays open.
Why founders look across the Atlantic
Start with the money. U.S.-based venture capital funds hold around €930 billion, according to a 2026 analysis by the European Central Bank, while EU funds hold about €150 billion. Early on, that gap is manageable. It starts to hurt in later rounds, when a company needs serious money to enter new markets, hire senior people and build expensive technology.
For an AI startup, the size of the cheque can decide how fast it trains and ships models, whether it can get enough computing power, and whether it can compete with companies that already have plenty of both.
Regulation comes up, too. A European Investment Bank study published in January surveyed founders and executives and found that companies rarely move for a single reason. Trouble raising venture capital, fragmented markets, rigid rules and a shortage of experienced commercial talent tend to show up together.
The EIB estimated that about one in ten EU scaleups have relocated, and roughly 85% of them went to the United States.
AI companies carry an extra burden. In August, a European Commission study flagged weak spots in the region’s digital infrastructure. Computing power is scarce and clustered in a handful of places, and companies lean heavily on non-European cloud and AI providers. That pushes up costs and makes the latest technology harder to get. AWS, for what it’s worth, is one of the largest of those providers.
Put it all together and a founder chasing fast growth is weighing a bigger market and investors with deeper pockets against staying put. For plenty of them, that’s an easy call.
How many startups truly leave
The situation is not as dire as the headline numbers indicate. The JRC’s figure of 3.3% to 4.3% is about ten times the rate for similar startups that never took venture money, which suggests the investors themselves are part of the pull.
Meanwhile, research from the Technical University of Munich found that foreign venture capital, especially from the U.S., strongly predicts whether a startup will move.
Most moves are partial. About 97% of startups that relocate keep operating in their home country, and only around three in four of their CEOs actually move. Usually, the holding company or the leadership team goes to the U.S. while engineering and research stay in Europe.
For a founder, that can be a smart trade: the company gets access to American investors, customers and networks without giving up the team it built at home.
The more successful the company, though, the likelier it is to go. In a JRC sample covering 2008 to 2021, 40 of 147 EU unicorns moved their headquarters abroad, 32 of them to the U.S. Vasco Pereira da Silva, head of policy at the lobby group Allied for Startups, told Science Business that when these companies move, Europe loses less in talent than in control over where the value ends up.
That’s what worries economists and policymakers. Europe can keep producing good companies and still miss out on the decisions, the intellectual property and the returns that make them matter to its economy.
What it will take to keep the winners
Brussels has started to respond. The Commission’s Startup and Scaleup Strategy promises easier access to financing, less paperwork, help attracting talent and fewer obstacles to growing across borders.
Its proposed EU Inc., often called the “28th regime”, would give companies a single corporate structure that works across the bloc. The aim is to “facilitate establishment and operation of business in the EU.”
Read more: Europe’s new Scaleup Fund is investing while EU Inc is still stuck in Parliament
The EIB is putting up money as well. Its TechEU program plans €70 billion in debt and equity for innovation by 2027, and its European Tech Champions Initiative backs large venture funds that invest at the late-growth stage, where the funding gap is widest.
Nobody serious is arguing that Europe should stop its startups from expanding abroad. Going global brings in investment, customers and know-how. The harder job is making it possible to grow without shipping the most valuable parts of the business somewhere else.
That could turn out to be the better test of Europe’s AI ambitions. It’s easy to count how many startups get founded, but a more telling number is how many become global companies while staying rooted in Europe’s labs and engineering teams.
The talent exists; it just needs to be nurtured. But is there enough for the greatest visionaries of the ecosystem to remain?
Featured image: created using generative technologies
