Europe has struggled to keep up with the U.S. in creating companies with $100 billion-plus market capitalization. The first one came this year when German software firm SAP which saw its market capitalization rise to $100 billion.
Surprisingly, Europe has more public tech companies than both China and the U.S. with 914 listed firms. But they are typically smaller valuations with 615 of those companies commanding market capitalization of less than $100 million, according to a report released on Tuesday by London-based VC (venture capital) firm Atomico. In the U.S., only 197 companies have market caps of less than $100 million.
On the upper end of the scale, the U.S. has 17 listed firms valued over $50 billion versus just one in Europe - software giant SAP. But this could change, according to Niklas Zennstrom, who co-founded Skype and is also the founder of investment firm Atomico.
"It's happening but we're confident in the next 10 years or so we will see companies from Europe that are on the scale of a Google or a Facebook," he said on the sidelines of the Slush technology event in Finland.
"We're positive we will see hundred billion dollar companies coming out of Europe, there is nothing systematically, there is nothing fundamental that holds that back."
Europe's technology scene has been growing quickly with 2016 on track to be a record year of funding for start-ups in the region, according to Atomico.
One area that start-ups in Europe have excelled in is so-called "deep tech" which includes areas such as AI (artificial intelligence), virtual reality and robotics. But AI is one area that has received a lot of hype.
Venture capital funding to European AI start-ups has so far hit $53.24 million in the fourth quarter of this year, already outstripping the $31.86 million of investment seen in the same period last year, according to data from analysis firm Pitchbook.
Zennstrom joked that many start-ups at Slush may have added "AI" to their company description to ride the wave of interest in the technology, but said despite the hype, it will have a big impact in the future.
"For sure it's a buzz word but it's also happening for real. Just like when we talked about the cloud several years ago, about mobile, of course there was buzz words but it happened. We predict AI is the most important technology in the next 10 years and (is) really going to have (a) profound impact on how we do things and really provide efficiencies across a lot of areas," Zennstrom told CNBC.
The U.S. technology giants are in an AI arms race, with nearly 140 private companies being acquired since 2011 by bigger players, according to data from CB Insights.
Europe has been a hot bed for this technology and a place U.S. firms have come to shop. Google bought London-based DeepMind for a reported £400 million ($500 million) in 2014, while just this year, Microsoft acquired predictive texting start-up SwiftKey.