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Anton Osika’s AI start-up may only be two years old but he already has a formidable goal: to become Europe’s first $1tn company.

Lovable, a “vibe coding” start-up from Stockholm that uses AI to assist software development, is off to a decent start, saying in July that its recurring revenues, if monthly figures are annualised, would surpass $100mn. It has been fielding offers to invest at valuations of more than $4bn.

“We have to reach a large scale — we know that there is a very clear path for us to become the first $1tn company from Europe,” says the 35-year-old chief executive and co-founder with Silicon Valley-esque bravado.

Stockholm is undoubtedly abuzz with AI projects as anywhere on the continent. But a series of sudden successes is in fact highlighting one of the most acute dilemmas of Europe’s tech scene.

Should a start-up sell out when a bigger competitor comes calling, or risk everything to become huge?

The different answers provided by Sweden’s three most prominent AI start-ups underscore the issues for a continent desperately trying to remain relevant against the tech superpowers of the US and China. There is a need for Europe to hold on to its most valuable companies — ones that dare to think big, even if they might fail.

Sana, a Swedish AI start-up where Osika used to work, has stoked the debate by selling itself to US software group Workday for $1.1bn. The sight of an established US group snapping up a promising European contender sparked sadness among many in the European tech scene.

“We’ve seen this movie so many times before,” says one Swedish tech investor, pointing for instance to promising fintech iZettle which was bought by PayPal for $2.2bn in 2018 just as it appeared to be taking off.

Joel Hellermark, the founder and chief executive of Sana, which uses AI to help workers search through their own company’s information, disagrees. He says distribution is “essential for ambitious AI companies” and that Workday offered access to two-thirds of the Fortune 500 list of biggest US companies by revenue.

“This is a defining moment for Sana and European AI more broadly. Ultimately, our decision was motivated by a shared vision and ambition to win in the enterprise AI space,” he says.

Hellermark adds that Europe is unlikely to compete with the US in AI foundation models such as OpenAI’s. But it should be able to “win” in AI applications, thanks to attributes such as Sweden’s strength in design.

Another application where a Swedish start-up is challenging is in legal AI. Legora, which has more than 400 law firms as customers, is challenging Harvey of the US in using AI to help lawyers with mundane tasks.

Max Junestrand, co-founder and chief executive, is also not planning to emulate Sana — even as Harvey increases the competition with adverts on the streets of Stockholm.

“We have no plans to sell Legora. Even though we’ve come incredibly far in just a couple of years . . . we’re still only at the starting line compared with what we aim to achieve in the long term: becoming the obvious choice for lawyers worldwide,” he adds.

One thing all three Swedish AI founders have in common is that they see their role — and success — as part of a bigger continental push. Junestrand says that in 10 years he hopes to have built “a large and exciting Swedish AI company that creates ripple effects and helps strengthen Europe’s position in AI”.

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The question is whether Europe can do that by selling off its most promising companies. It is surely no surprise that the successful start-ups most often cited by up-and-coming founders are the likes of Spotify and Klarna, companies that stayed independent and dared to try to become big, even if they made their stock market listings in the US. Few now mention the likes of Mojang, the maker of Minecraft bought by Microsoft or iZettle as an inspiration.

Stockholm itself is home to more unicorns per capita than any other region globally outside Silicon Valley, according to one estimate by venture capital firm Atomico. Increasingly, that depends on the entrepreneurial spirit from within its start-up scene and private funding, rather than any government initiative. The Wallenberg family business empire has done more for AI in the country as investors than the state, for instance.

It is unlikely therefore that Sana is the last Swedish start-up that a bigger US rival tries to buy. For Europe’s future, it is vital that more dare to be like Osika and dream big, no matter the obstacles on the way to get there.

richard.milne@ft.com