The European Union has announced a significant initiative to allocate €10 billion in funding to establish seven AI gigafactories. This strategic move aims to address the existing AI gap between the United States and China, as highlighted by the bloc’s executive body on Thursday. The European Commission envisions that this public financing will encourage an additional €20 billion in private investments.
“Access to the raw scale of computing power within AI gigafactories is a strategic necessity for Europe as AI development accelerates,” said Henna Virkkunen, the Commission executive vice president overseeing tech sovereignty.
This endeavour is driven by growing concerns regarding technological dependence on foreign providers, which may pose risks to European interests. Notably, US President Donald Trump has criticised the EU’s technology regulations, while China has imposed restrictions on the supply of critical minerals essential to the technology sector.
Contract bids are now being accepted for the construction of these gigafactories, which are designed to produce a minimum of 100,000 advanced AI chips, thereby achieving approximately four times the processing power of the current data centres operational in the EU. The completion of these seven gigafactories is expected to more than double Europe’s existing computing capabilities.
According to a 2025 assessment by the US Federal Reserve, Europe currently trails the US and China in key sectors vital for AI development. China possesses considerable electrical power capacity for data centres, and the US holds a substantial share of private AI investment. Additionally, Europe faces challenges: it does not manufacture a significant number of the millions of components required for data centres, and energy costs can be two to three times higher than those in the US and China, as reported by the Commission to the European Parliament in June.
“European businesses and public authorities will continue to rely on US AI providers to the detriment of European service providers struggling to work at the frontier,” said the report, which listed the bloc’s top five cloud service providers as all American. “Dependence on hyperscale cloud and AI computing service providers, particularly for highly critical use cases, will continue to expose data to third-country access and carry risks to service continuity, endangering operational autonomy.”
Currently, France’s Mistral operates one of the largest AI data centres in the EU at its Paris campus. While Mistral has developed the Le Chat chatbot, it has struggled to keep pace with leading American firms such as OpenAI and prominent Chinese competitors like DeepSeek.
Political leaders across Europe, including French President Emmanuel Macron, have expressed concern about the continent’s lack of domestic AI companies. There is also significant apprehension about the potential economic disruptions and privacy concerns associated with emerging technologies. Other EU member states have moved towards enhancing their supercomputer centres.
In November 2024, the Polish government supported the establishment of the Academic Computer Centre Cyfronet AGH, a collaboration between the AGH University of Science and Technology in Krakow and Cyfronet, a leading institution in the operation and development of High-Performance Computers and the Municipal Academic Computer Network. Cyfronet is actively involved in leading European projects to develop supercomputing technologies and services.
The Commission has assured that AI products developed through this expanding network of data centres will comply with EU standards on data protection, safety, security, and ethics, citing the bloc’s Digital Services Act and Digital Markets Act.
In June, a group of 40 mayors from around the world signed a pact to mitigate the adverse impacts of AI data centre construction on natural resources, energy prices, and climate goals in cities ranging from Phoenix to Melbourne.
This article used information from The Associated Press.
