The arrival of artificial intelligence companies, OpenAI and Anthropic, in Zurich has raised hopes that Switzerland has the research and talent firepower to forge a prominent role in the much-hyped AI industry.
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Whether Switzerland can successfully grow an AI hub hinges on the country’s continued ability to produce and attract the best talent and finance promising start-ups. It also depends on the way it chooses to regulate AI in future, according to experts.
Switzerland is better known for its banks, watches and pharmaceutical industry than information technology. But OpenAI and Anthropic, the creators of rival AI assistants ChatGPT and Claude, have now joined the likes of Nvidia, Apple and Google in basing AI research offices in the Alpine state.
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Open AI’s vice president of research, Mark Chen, hailed Switzerland as a “leading European technology centre”. Zurich is a “top hub for research talent”, stated Anthropic.
The build-up of US AI pacesetters does not mean Switzerland is unchallenged as European hub of activity. Both OpenAI and Anthropic already have offices in other European locations, including London and Dublin.
Switzerland could differentiate itself from European Union locations with its regulatory treatment of AI. The Swiss communications ministry is due to deliver its recommendations in response to the EU AI Act, which came into force earlier this year.
Hans Gersbach, co-director at the KOF Swiss Economic Institute, noted in September that EU regulation “places very high demands on firms” with the sheer volume of rules and paperwork. “This poses the risk that innovations are not worthwhile or do not achieve market success,” he said in an interview with KOF.
+ AI regulation and Switzerland
“Although the EU’s AI Act points in the right direction, there are some areas where innovators and businesses could be given more leeway,” he added. “If Switzerland manages to create smarter, more legally sound and slightly leaner regulation than the EU, there will be great opportunities for us in the technology sector. Switzerland has the potential to develop into a global AI hub.”
US connection
The arrival of global AI leaders from the US has given an extra boost to the domestic Swiss AI industry.
“The connection with the US AI ecosystem is very strong. It’s developing into a symbiotic relationship,” said Alexander Brunner, a business consultant who is currently writing a book on the Swiss AI market.
As further evidence of this, Californian chip maker Nvidia arrived in Zurich by acquiring Swiss AI start-up Animatico two years ago.
Marcel Salathé, co-director of the AI Center at the Swiss Federal Institute of Technology Lausanne (EPFL), hopes that the new arrivals will start to spread operations to the French-speaking part of Switzerland.
OpenAI poached three researchers from Google Deepmind in Zurich, highlighting the intense competition for talent in the rapidly growing industry. The EPFL AI Center currently houses 1,000 students and post-doctorate researchers.
“The growth of AI presents us with a once-in-a-generation moment,” Salathé said. “Some of the world’s biggest companies of the future are now being formed in garages. It would be nice if some of them can be in this region.”
Salathé notes that Switzerland missed an opportunity to build a world-leading industry when the World Wide Web was invented at the Geneva-based CERN [the European Organization for Nuclear Research] in 1989. “We must make sure that does not happen again,” he said.
Financing shortfall
To realise their full potential, Swiss start-ups need more venture capital and collaboration with established industries. Sectors such as healthcare, robotics and finance need to incorporate AI technology to remain cutting-edge.
So far, investments in Swiss AI start-ups have been negligible compared to other countries, according to a December 2023 report by the media group Startupticker.
“Although the number of AI start-ups is generally impressive, Switzerland’s position in terms of investment is significantly worse,” the report stated. “In hardly any other country is the median investment as low as in Switzerland. The gap between it and the leading nations is enormous: Israeli enablers and application developers attracted ten times more money than AI companies in this country.”
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OpenAI to set up new office in Switzerland
Alexander Brunner has urged well established Swiss multinationals to incorporate more Swiss-made AI innovation, rather than turning to US giants.
“Having outstanding AI research, great AI talent and exciting AI startups is insufficient to compete in the global AI race. It is about building an entire AI value chain, from education, infrastructure, and corporate buying from local AI companies,” he wrote in a recent Substack post.
AI research in Switzerland is led by the federal institutes of technology in Zurich and Lausanne (ETH Zurich and EPFL). The two leading universities have recently announced the formation of a new Swiss National AI Institute to guide research, education and AI innovation in Switzerland.
Earlier this year, they also unveiled Switzerland’s new supercomputer, Alps, which will be 20 times more powerful than its predecessor once fully operational and is now one of the most advanced supercomputers in the world.
Both universities also operate AI competence centres designed to translate research into real use cases across a range of sectors, from healthcare to robotics and meeting sustainability goals.
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