TechCrunch Industry News The global race for the AI app layer is still on; plus Australian spy chief warns Chinese hackers are ‘probing’ critical networks for espionage and sabotage
Nov 12, 2025
The global race for AI applications is heating up, with Europe and Israel catching up in funding. AI-native apps are scaling to serious revenue much faster than before. Meanwhile, concerns grow as Australia’s intelligence chief reveals that Chinese hackers are probing critical infrastructure, potentially setting the stage for sabotage. This includes alarming discussions about specific threats targeting essential services in anticipation of geopolitical tensions.
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Europe Shines At The AI App Layer
- Accel finds the U.S. leads in funding for large AI models while Europe and Israel punch above weight in AI applications and cloud startups.
- European and Israeli app founders combine technical talent with deep market expertise to build fast-growing, efficient software companies.
AI-Native Apps Are Growing Unusually Fast
- Accel notes a new breed of AI-native applications reaching $100M ARR in years rather than decades with very high revenue per headcount.
- Investors see strong growth velocity and efficiency across both American and European AI-native companies.
Foundation Models Aren't Europe's Strongest Bet
- Accel is skeptical about Europe producing major foundation-model leaders but thinks smaller model plays remain possible.
- Investors are instead actively competing for application-layer opportunities despite defensibility questions.