The AI company FiveSquare, an Upper Austrian start-up, has won the EDISON 2024 in the ChangeMaker category. What started out as a small consultancy firm is set to become an AI ecosystem that promotes Europe's technological sovereignty.
In a new office building in Linz, 35 people are working on a grand vision: AI made in Europe. Hans-Peter Pichler and Patrick Haidinger, the founders of FiveSquare, are convinced that the new technology should not be dominated by American tech giants. "You know the big AI models like ChatGPT and co. They mostly run on non-European infrastructure," explains Pichler. "We have created something that we operate in Austrian data centers." In this way, the entrepreneurs want to offer an alternative to the US giants for critical use cases.
FiveSquare was awarded the prestigious EDISON 2024 ideas prize in the ChangeMaker category for its AI solutions, which is awarded annually by the Upper Austrian start-up incubator tech2b and financed by the Upper Austrian Chamber of Commerce. The prize, explains Markus Achleitner, Provincial Councillor for Economic Affairs, recognizes companies that have the potential to fundamentally change existing systems. Achleitner: "For us, changemakers are companies that develop new technologies or use existing technologies in new ways. This is how they enable change - and very quickly."
The story of FiveSquare begins in 2019, at a time when AI applications such as ChatGPT were not yet on the market and technologies such as Large Language Models (LLMs) were unknown to the masses. Pichler and Haidinger, who both come from the research environment of the Johannes Kepler University in Linz, recognized a gap: AI was already advanced in science, but had barely arrived in industry. "We saw this gap," says Haidinger, "and we thought to ourselves: 'We have to close this gap!
The start was not easy. "In the beginning, two of us went around explaining to one industrial company after another that AI was going to be the next big thing. They all thought we were crackpots," Pichler recalls. But the two of them persisted - and public perception caught up. With the breakthrough of ChatGPT, interest in LLMs and AI-based applications exploded.
FiveSquare's business model consists of two pillars: firstly, the Linz-based start-up advises and supports companies in the introduction of AI solutions; applications range from the optimization of production lines to AI-supported customer support and process automation with the help of language models. FiveSquare has already worked with Voestalpine, Pöttinger Landtechnik and several banks. There are also collaborations with the public sector.
Secondly, Pichler and Haidinger and their team have developed "KARLI", an LLM for companies that not only impresses with its distinctly Upper Austrian name. To this end, the founders have developed and merged language models from the open source community in a targeted manner. FiveSquare aims to score points with data security: KARLI is operated on Austrian servers.
The duo also believes that European companies value sovereignty. At a time when the AI market is dominated by the USA, the Upper Austrian company is working on creating a European alternative. This focus fits in perfectly with ChangeMaker, says Achleitner, who wants to reward precisely such transformative approaches.
The federal state is facing demographic challenges that it will only be able to overcome with additional changemakers: Of the current 700,000 workers, there will be a shortage of around 151,000 by 2040 due to demographic trends, explains the State Economic Councillor - around 20%. AI solutions could help to close this gap. "AI has the potential to make companies more productive, which could at least partially replace these missing workers," explains Achleitner. Looking at the two founders, he adds: "But many companies don't know how to use the technology, and FiveSquare can help them."
For Pichler and Haidinger, the prize brought visibility in addition to the PR package worth around €20,000. "It's also a platform," says Achleitner. The award ceremony brings together company representatives from all over Austria - potential customers and partners.
Pichler and Haidinger will need this visibility, as their plans are ambitious: FiveSquare wants to grow significantly. Over the next few years, many more employees will support the team in its mission. "We have laid all the foundations - the brand, the name, the structures behind it - so that we can now really take off," says Haidinger. So far, FiveSquare has grown organically and has not needed any investor money. Pichler jokes: "We have really worked." Organic growth may be slower, but it offers more stability. The fact that start-ups across Europe have (been able to) raise less money in recent years may also have contributed to this decision.
Despite all the growth plans, FiveSquare's headquarters will remain in Linz. "Alongside Vienna, Upper Austria is a very cool breeding ground," emphasizes Pichler. "There is a lot of industry, and with the JKU we also have access to a good workforce." The dense network of industry, research and education creates an ecosystem in which innovative ideas can flourish. However, the FiveSquare office, which they recently moved into, could become quite cramped in the future.
By the way: Anyone who has an innovative idea and lives in Upper Austria can apply for the EDISON Ideas Competition 2025 until the end of April.
Photo: Christian Huber
Source: Forbes
