Reading the media these days, one might think that the tech, journalism, and investment communities were inadvertently wishing for the creation of an AI “bubble.” Whether or not a bubble exists remains debatable, but the conversation itself took on a life of its own. Every article predicting the collapse of NASDAQ increases investor nervousness, which leads to another article about the NASDAQ collapse, and so the world spins endlessly.
Often, the most effective protection against market volatility is to integrate today’s technology ubiquitously into the social fabric, such that it cannot quickly lose its value. When there is a disconnect between people’s actual experiences and the enthusiasm felt on trading floors or in boardrooms, problems can arise.
We can learn something in this regard from the 89th most populous country in the world: my native Sweden. In the 1990s, the Swedish government introduced a law called Hem-PC-reformen (the Home-PC reform), which aimed to install a computer in every home. This decision is often seen as the starting point for subsequent decades of technological advancement and “punching above our weight.” It wasn’t a corporate strategic manifesto or a shiny new technology tool created by a CEO; it was a nationwide policy for all of us, designed to firmly anchor new technology in our lives.
Today, Stockholm has the highest number of unicorns per capita of any city in the world outside of Silicon Valley. Swedish AI startups are booming. Legora, which automates lawyers’ tasks, is raising capital at a pace Valuation of $1.8 billion. Einride, the electric vehicle unicorn, recently announced $100 million to develop autonomous freight. Vibe-coding platform Lovable, which helps people build apps with AI, is one of the fastest-growing companies in the world. And last month, business technology company Workday acquired our own company, Sana, for $1.1 billion.
Not bad for a country with half the population of New York State, nestled on the edge of the Arctic Circle. People always wonder how a nation like ours can accomplish so much. While there is no secret sauce, there are a few essential ingredients.
The aforementioned Home‑PC reform was catalyzed by the winter darkness which can last for 18 hours, meaning that we Swedes spent hours in front of our computers experimenting in an early Internet environment.
This digitally literate generation went on to create world-renowned technology companies. Skype was founded in 2003 to popularize video calling technology. Just like King, the creator of Candy Crush. In 2005, Klarna was born. 2006, Spotify. In 2009, Mojang laid the first blocks of Minecraft.
We Swedes are very proud of these achievements. They show us what is possible on the world stage. They have also provided huge moments of liquidity to our ecosystem. Skype and Mojang were bought by MicrosoftKing’s Activation, all at a multi-billion dollar price tag. Spotify went public in 2018 and Klarna earlier this year. Each of these success stories has created another group of millionaires, many of whom feel compelled to reinvest in Sweden’s tech and startup sectors.
This flywheel effect has made our AI industry what it is today. Our scaleups stand on the shoulders of giants, in an environment conducive to business development. There is capital available to deserving entrepreneurs, often deployed by quality investment firms like EQTNorthzone and Creandum. It is relatively easy to start a business here, and our stock options system encourages business creation. Stockholm is home to both the KTH engineering university and the Handelshögskolan business school, many of whose founders have earned degrees (alongside many successful entrepreneurs who skip college altogether). We also have very high English proficiency rates.
The government also continues to play a crucial role. Sweden spends a higher proportion of its GDP on research and development (3.57%) than any other European country. In Sweden, any employee can take six months off to start a business, a program known as tjänstlediget. And to mirror the successful PC Home Reform policy of the 1990s, the Prime Minister this year supported a Swedish AI reform program that makes agentic AI free for all civil servants, students, teachers, research institutes and non-profit organizations.
There are also aspects of our culture that help us build great businesses. We are the country of Volvo and IKEA, from a Swedish design philosophy known for combining function and form. Many software engineers I know here are passionate about aesthetics, which means that an app’s landing page is often treated with the same attention to detail as a Bruno Mathsson chair.
Finally, we are also a humble nation (he said while writing an article on the greatness of our nation!). Putting your head above everyone else is generally frowned upon. While this may have societal downsides, it has helped foster an environment of high trust and low ego in our technology. Information is shared freely between different organizations and entrepreneurs, knowing that every Swedish success in AI benefits everyone.
Of course, we still have challenges ahead, ranging from the seemingly trivial (Scandinavian Airlines, please launch a direct flight to San Francisco) to the fundamental (we still rely on US investors for capital at a later stage).
But there is no denying that the Swedish approach to technology – a broad and deep acceptance – is a useful story for the rest of the world. If we are concerned about the speed at which the value of AI companies has increased and that other economic indicators will catch up to avoid a bubble, we need to integrate this technology into our daily lives.
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