Robin Rombach, CEO of German AI image generation specialist Black Forest Labs, told AFP in Freiburg im Breisgau, Germany, that Europe needs to view artificial intelligence with more optimism, even as warnings about AI’s dangers grow. The pitch is familiar: less fear, more opportunity, and a continent told to hurry up before the Americans and Chinese get even further ahead. Behind the language of innovation sits the usual machinery of power — capital, computing power, and a small circle of firms deciding who gets to build the future.
Europe lags behind the United States and China in cutting-edge AI models, and policymakers and firms have been scrambling to find ways to make up lost ground. That scramble has become a competition between states, investors, and corporate labs, with ordinary people left to absorb the risks and the job losses. Black Forest Labs, based in Freiburg, has emerged as a prominent developer of AI image-generation models. The startup is valued at around $3.25 billion. It recently drew headlines when it announced US director Martin Scorsese as an advisor, prompting an angry response from some in Hollywood concerned about AI taking production jobs.
Capital, Computing, and the New Gatekeepers
Rombach, 33, helped develop latent diffusion, a breakthrough that underpins many of today’s AI image-generation systems. He and a group of fellow computer scientists founded the AI lab in 2024. The company has just over 100 staff. Its FLUX models generate still and moving images from text, and the company is now also expanding into physical AI. Its latest model has been tested at carmaker Audi as part of a project aimed at enabling robots to perform production-line tasks.
That is the shape of the new economy in miniature: a small company, a giant valuation, a carmaker, and a push toward automation on the factory floor. The people doing the work are not the ones setting the terms. The people affected by the technology are not the ones deciding where it goes.
The company has a second headquarters in San Francisco and secured early backing from Silicon Valley venture capital firm Andreessen Horowitz. Rombach said that when Black Forest Labs was founded, there was no real startup ecosystem in Europe, particularly for frontier deep tech. He said that if you want to build a frontier model in a very competitive space, you need to do this quickly, and that certain ingredients are needed for success, such as a lot of capital and computing power.
Zach Meyers of CERRE, a Brussels-based think tank, echoed some of Rombach’s concerns, saying the biggest barrier to AI growth and innovation in Europe was access to capital. He said most European companies rely on financing from banks, which are traditionally more cautious than venture capital investors about backing businesses that may take years to become profitable. Meyers said that is not how technology markets work, particularly with a really nascent technology like AI.
The Brussels Logic of Scarcity
That financing gap is not just a technical problem. It is the market speaking in the voice of institutions, deciding which projects get oxygen and which don’t. Banks, venture capital, think tanks, and startup founders all describe the same arrangement in different accents: the future belongs to whoever can marshal enough money and computing power fast enough. The rest can wait outside.
Rombach said his company’s focus on open-weight AI models, some of which can be downloaded by researchers and developers, increases transparency and increases safety. He called for an open approach to AI development, warning it would be fundamentally wrong for such a crucial technology to be controlled by a few companies, rendering oversight more difficult. He said the main thing that can wipe out humanity is stupidity.
That warning lands in a sector already shaped by concentration, secrecy, and the race for advantage. Open-weight models may be downloadable, but the broader system still runs on ownership, investment, and access. The company’s own growth depends on the same capital structures that keep most people out of the room while a handful of firms and investors set the pace.
Black Forest Labs has just over 100 staff, a second headquarters in San Francisco, and early backing from Andreessen Horowitz. It was founded in 2024, and in its second year it is already valued at around $3.25 billion. The numbers tell their own story. A tiny workforce, a transatlantic corporate footprint, and a valuation that dwarfs the number of people actually building the thing.
The debate in Europe, for all the talk of optimism and safety, remains trapped inside the same narrow frame: how to catch up, how to finance, how to compete. The people making the models want more capital. The think tanks want better financing. The firms want speed. And the workers, artists, researchers, and factory staff who will live with the consequences are expected to accept the deal as progress.