AI is helping startups scale at a rapid pace

This week, Microsoft felt the long arm of European tech competition authorities. In what looked like a blast from the past, the world's largest company by market cap decided to stop bundling its Teams app and its Office software globally. That decision followed its unbundling of the offerings in Europe last year, which headed off an EU antitrust action.

But there are other lessons for tech companies to learn in Brussels, and more broadly, in Belgium.

The Financial Times reported last week that Belgium was among the 10 most represented nations in its ranking of Europe's 1,000 fastest growing companies for the first time, led by BeInfluence Europe, Logistics Capital Partners, and Techwolf.

In the same ranking, Italy, often seen as an economic laggard and home to many geriatric CEOs, had by far the most fast-growing companies in Europe, beating out the U.K., Germany, and France. Italy's cohort is led by Bidberry, The Sense Experience Resort, and WECO.

The surprising dominance of Belgium and Italy defies the assumption that the AI era is a "winner-take-all" business landscape, in which only behemoths like Microsoft, Alphabet and other "Magnificent Seven" tech firms will succeed. Belgian and Italian companies are typically SME-sized, as opposed to the large multinationals often found elsewhere in Europe.

I asked Jürgen Ingels, founder and funder of several fast-growing Belgian tech companies—payments company Clear2pay, game developer Crazygames—to explain the success of his (and my) home country. He pointed to classic components: a government that gets out of the way and entrepreneurs that create not just one firm but an entire startup ecosystem.

And he talked about how AI was allowing startups to scale at an unheard-of pace.

"Business models are changing," he said. "I see tech companies with 10, 20, 30 people and a high EBITDA automating their back office. It's not about capital anymore. It's about creativity. That's what makes it interesting. You don't have to be in Silicon Valley anymore." 

On a related note, If you don't buy into the AI hype cycle, watch Jon Stewart's Monday segment on "the false promise of AI." The comedian doesn't believe the dominant corporate AI narrative and quotes everyone from Satya Nadella to Sam Altman to make fun of those—like me—who do.

More news below.

Peter Vanham

peter.vanham@fortune.com

@petervanham

TOP NEWS

What does Boeing need in a CEO?

Boeing's board will need to find a new CEO to replace Dave Calhoun, who will step down at the end of the year amid the planemaker's safety scandals. Insiders tell Fortune's Shawn Tully that Boeing's next CEO will likely need to be a newcomer, young, and a hands-on specialist to get manufacturing back on track. Fortune

A Bay Area investment firm

Sixth Street Partners, the Bay Area-based investment firm from Goldman Sachs veteran Alan Waxman, is emerging as a younger, tech-savvy, and nimble alternative to its Wall Street competitors. The firm manages a $27 billion fund (out of a total AUM of $75 billion), which invests in just about anything, including in sports teams like the San Antonio Spurs. Despite its success, Waxman says a Sixth Street IPO is "not on the radar" right now. Fortune

Intel's chipmaking struggles

Intel reported a $7 billion operating loss in its chipmaking division last year, as the U.S. company tries to catch up to leading semiconductor manufacturer TSMC. The company's shares dropped 4% in extended trading following the news. Intel says it expects operating losses in its chipmaking business to peak this year. CNBC

AROUND THE WATERCOOLER

The 'Meta AI mafia' brain drain continues with at least 3 more high-level departures by Sharon Goldman

Slack's chief product officer steps down, leaving none of the messaging service's top early executives remaining by Kylie Robison and Alexandra Sternlicht

McKinsey is paying some managers up to 9 months salary to leave—Here's when it makes sense to take the money by Emma Burleigh

Schneider Electric head says the future of energy 'is in a deadlock'—but demand for clean electricity will show the way by Prarthana Prakash

The average Gen Zer started saving for retirement 15 years earlier than baby boomers. It still may not be enough by Alicia Adamczyk

Commentary: Why Bob Iger's strategy for the next decade of growth at Disney promises a magic carpet ride for the Magic Kingdom's future by Jeffrey Sonnenfeld and Steven Tian

This edition of CEO Daily was curated by Nicholas Gordon. 

This is the web version of CEO Daily, a newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.