The real moat in the age of AI | redalpine x Sifted European Dynamism report

Earlier this month, redalpine and Sifted published the European Dynamism report - a deep dive into six sectors where Europe is accelerating fast and where we believe the next wave of global leaders will emerge. Over the coming weeks, we're going deeper on each one: the thesis, why we believe Europe has a structural advantage, and the top startups and scale-ups to watch.

First up: intelligent enterprise.

AI is already rewriting the rules of office work. Models draft emails, write code, field customer service calls. But this is just the beginning.

The technology's effectiveness varies dramatically across different tasks, what researchers refer to as the "jagged frontier" of automation. The clearest example of AI excelling at a high-value task is coding, because code is verifiable: it's easy to check whether it works without human review. This dynamic is often described as  Verifier's Law - verifying a solution is far easier than creating one. The bottleneck to AI progress, then, is developing scalable verification methods that let systems learn and improve without human oversight.

So where is the moat? As barriers to entry fall, strong distribution becomes what distinguishes the winners from the rest. Companies are racing to gain users quickly before markets consolidate. But distribution alone isn't enough. The real long-term advantage lies in data. In the same way network effects built the previous generation of tech giants, proprietary data flywheels, combined with an advancement in verifiability to enable model training, will define the next one. Companies that build real-time infrastructure to improve models based on real, verified (in)correct outputs (and feed those signals back into the system, rather than just adjusting prompts dynamically) will compound their advantage over time.

Selling AI tools also requires more than engineering. It takes change management: redesigning processes, handling edge cases, and supporting users at every step. Automation doesn't eliminate complexity. It moves it. That's where deep product understanding and use case expertise become a third key layer of differentiation. Future leaders can therefore distinguish themselves by building deeply integrated solutions that leverage the ever increasing rate of model improvement, while staying defensible as they move from nice-to-have efficiency tools to being part of the core operating system of departments or entire organisations. 

The next frontier of AI will be led by companies that can align AI with human goals and keep improving over time. Enter AI as an "orchestration brain" - multi-agent systems that don't just execute individual tasks, but run entire business processes end to end. As this layer expands, new challenges will emerge around coordination, security, and authentication. Where enterprises see problems, investors see opportunity.

Read the European Dynamism report in full here or on Sifted.

Europe's advantage

Enterprise AI funding in Europe more than doubled in a single year, from €3.6bn in 2024 to €8.2bn in 2025. Job postings for "forward-deployed engineers" rose 800% between January and September 2025. These are just two signals that the market is moving, and fast.

Europe's industrial base is frequently underestimated as an AI asset. As the world's second-largest economy with a particularly strong industrial heritage, the efficiency gains from enterprise AI, and especially the new frontier of physical AI, will be felt here more than almost anywhere else. 76% of EU corporate research already involves university partners, highlighting a depth of integration between science and industry that few ecosystems can match.

In the past, the majority of global tech leaders came out of Silicon Valley, creating a local flywheel of talent. Today, Europe has built a rich talent pool of founders, scientists, and AI experts producing world-class AI startups and scale-ups across the continent. We’ve listed a sample of these companies below.