Writer: Tomoko Tanizaki Editing: ASCII STARTUP

Cyber Valley is the largest AI consortium in Europe, established by the Max Planck Institute and the Fraunhofer-Gesellschaft in Germany to support entrepreneurship in the AI and robotics fields. We spoke with Alexander Diehl, Senior Advisor of Cyber Valley, about the support for entrepreneurship in the AI field in Germany and Europe.

Profile Introduction of Alexander Diehl

Alexander Rudolf Diehl (born 1975)　
is a German entrepreneur, angel investor and advisor for start-up and growth stage companies. In 2006 he founded digital design studio KKLD* in Berlin, which he sold to WPP plc in 2012. He also co-founded Architizer Inc. in New York City, which was acquired by MaterialBank in 2022. In 2011 Alexander initiated BMW iVentures, which he managed as managing director until 2015.
Alexander is a Senior Advisor to Cyber ​​Valley and an active angel investor in European technology companies such as Wandelbots, Decentriq, Meshcapade, Reasonal and JF&C.
Alexander studied classical music at the Royal Academy of Music and King's College in London and at the Royal Norther College in Manchester, UK.

Cyber Valley, a Leader in Research and Entrepreneurship in the AI Domain

Cyber Valley is the largest AI consortium in Europe, founded by the Max Planck Institute and the Fraunhofer-Gesellschaft, based primarily in Bartenwürttemberg, Germany. It has partnered with educational and research institutions not only in Germany, such as the Universities of Stuttgart and Tübingen, but also in other European countries, including the University of Cambridge, University of Paris, University of Prague, and University of Amsterdam, to name a few. It also partners with a number of private companies such as Amazon, BMW, Daimler, Bosch, and venture capitalists such as BMW i Ventures (U.S. and Germany) and Atlantic Labs (Germany), supporting talented researchers in the fields of AI and robotics to start their own businesses and promote the overall development of these industries.

Cyber Valley is comprised of a network of about 100 departments and more than 2,000 AI researchers who with friendly competition and entrepreneurial opportunities being at the forefront of the consortium. One of the key components of the initiative is the IMPRS-IS (International Max Planck Research School for Intelligent Systems), an interdisciplinary program for doctoral students in the field of AI. The IMPRS-IS, which attracts nearly 1,000 applicants from around the world each year, is renowned as the premier program in the field of AI research.

「IMPRS-IS」https://imprs.is.mpg.de/

“The majority of the best and brightest people in science and deep tech go on to graduate school and either work for a major tech company or pursue a Ph.D,” Alexander Diehl, Senior Advisor at Cyber Valley, explains the background behind the initiative.

Compared to a decade ago, there are more sources of information for early-stage companies - it is easier now more than ever to attract investment. That being said, the number of startups is still relatively small, and Mr. Diehl says he hopes to continue to grow that number.

“Advancing past the research requires more attention. In countries and regions like Europe, where the entrepreneurial culture and ecosystem are not yet as mature as Silicon Valley, it is important to have a mechanism to give them a boost. That is where Cyber Valley comes in."

The Program that Nurtures Startup Eggs into Chicks.

The Cyber Valley initiative, which began in 2019, is already budding and the network of startups and VCs is gradually expanding. Startup success stories are also steadily beginning to emerge.

For example, MARKT-PILOT is a startup that develops a service in which AI analyzes market needs for spare parts, based on lead times and other factors and offers the best prices. Southwest Germany has long been a center of heavy industry. The service is highly regarded as a service that brings global competitiveness to local factories, and the company has succeeded in raising 6.2 million euros (approximately 900 million yen) in its early stage of funding in 2022. Currently, the company is also expanding into the U.S. to further expand its business.

「MARKT-PILOT」www.markt-pilot.com

Aleph Alpha is a another fast-growing startup from Cyber Valley. The company develops multimodal AI that combines image processing and natural language processing. Its AI chatbot, deployed in Heidelberg's administrative services, is a prime example of this. The chatbot, which answers questions such as school opening and closing times and how to renew a passport in natural conversation, is currently available in five languages and is even fluent in different dialects.

「Aleph Alpha」https://www.aleph-alpha.com/

To further accelerate its efforts, Cyber Valley piloted an incubation program in 2022, both in Stuttgart and Tübingen. The entire program lasted six weeks, with on-site full-day workshops held weekly to hone entrepreneurial ideas. All startups involved in Cyber Valley and working in the areas of AI and advanced robotics are eligible to participate. Startups from other countries and regions, even including Japan, are also welcome to participate, as long as they collaborate with Cyber Valley - even if they do not have a base in Germany.

In this pilot, six teams were formed by individuals from a variety of fields, including research institutions and companies. Amazon and Bosch sponsored and participated in the business evaluation. In the end, three teams successfully went on to start their own businesses. The success of the program led to the decision to officially launch the program in 2023.

“The event is also a great place to find others in the same field who want to start their own businesses. Participants are also given the opportunity for pre-seed investment from VCs and institutional investment. Exposure to this wealth of resources, including investors and those with entrepreneurial skills, provides a place where the initial inspiration to do something can be evolved into entrepreneurship," said Diehl.

Is Government and Administrative Support Important for Startup Development?

One of the reasons Cyber Valley has developed to this point is that through government-launched startup support policy and the strong backup by state administrative agencies. In the area of emerging technologies, where private companies and financial institutions are reluctant to provide support due to risk aversion, it is vital to have state-level support, Diehl indicated.

“Germany, like Japan, has a strong orientation toward stability and security, leading to a tendency to hesitate when taking on new challenges out of a fear of failure. In a country or region with such a national character, it is important for the government to encourage public-private partnerships in emerging technologies and to communicate to the public and the next generation that entrepreneurship and these challenges are highly valued," said Diehl.

Mr. Diehl referred to the topic of the Tokyo Metropolitan Government's efforts to develop a large-scale start-up support center with a capacity for 1,000 companies, with the goal of a full-scale opening in FY2024. He commends these efforts as having a positive impact on fostering a culture of entrepreneurship and human resource development, as well as encouraging the development and revitalization of the market.

The government's efforts also have a positive impact on changing the mindset of companies, Diehl noted.

“Until now, Germany has emphasized a very clear career path: graduate from a university and start working for a company. Companies, of course, have hired people with this mindset. Now, however, more and more companies are placing strong importance on the mentality, technical skills, and management skills of people who start their own businesses. "

Patent Applications Should be Filed to Match the Speed of Innovation

Regarding patent-related matters and technology transfer within Cyber Valley, patent attorneys may give lectures at incubation programs or irregular workshops, but Cyber Valley does not provide direct support in these matters. For patent applications and licensing agreements, Cyber Valley backs up researchers affiliated with partner universities and research institutes.

“When people who are thinking about starting a business meet their peers through incubation programs and find out that it takes years just to file a patent application, they may lose all motivation since it would be easier to simply get a higher salary at a big tech company," he lamented. We want to lower these hurdles so as not to extinguish that fire of passion in those who are trying to create something new.

Cyber Valley is also working alongside the German federal agency, SPRIN-D, to relax laws and regulations related to patents and technology transfer, among other hurdles.. SPRIN-D is a government agency created in in a similar manner to the U.S. Defense Advanced Research Projects Agency (DARPA), which concentrates investment in advanced R&D as well as supporting advanced organizations that promote wider adoption of emerging technologies . It is not dissimilar to Japan's moonshot R&D system, but it is characterized by its broad approach to supporting technological fields.

“Germany, too, recognizes the challenges involved in turning basic research into practical applications, and is tackling reforms headon to prevent the seeds of innovation from withering away," said Diehl.

「SPRIN-D」www.sprind.org

Further Development is Expected in 2023

The year 2023 will be a important year of further expansion of activities, says Diehl. The first of these is the European Laboratory for Learning and Intelligent Systems (ELLIS Institute) in Tübingen, a research institute founded to promote basic research and practical applications of AI across Europe and to establish Europe's global competitiveness in this field. To that end, its first research facility opened in Tübingen.

「European Lab for Learning & Intelligent Systems」https://ellis.eu/

Mr Diehl will alsobe more active than ever in efforts outside of Europe. He, himself, is an entrepreneur and angel investor who was involved in starting KKLD, Architizer, and BMW i Ventures. He believes in a future where the next generation will thrive, and he is working hard to nurture and foster this community.

“Cyber Valley's mission is to support research and development to ensure that AI has a positive impact on European society. We look forward to working with Japan as a partner in building the future of AI together," said Diehl.

Related sites

・Cyber Valley
https://cyber-valley.de/
・JPO information for startups
https://www.jpo.go.jp/support/startup/index.html
・ASCII Startup
https://ascii.jp/featuredarticles/1773010/


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