EU Allocates 10 Billion Euros for Construction of Artificial Intelligence Gigafactories

The European Union is offering 10 billion euros to finance companies for the construction of seven artificial intelligence (AI) gigafactories in an effort to catch up in this field with the United States and China, the European Commission announced today.

The European Commission added that it hopes this public funding will attract an additional 20 billion euros in private investment.

„Access to raw-scale computing power with AI gigafactories is a strategic necessity for Europe as the development of artificial intelligence accelerates,“ said Henna Virkkunen, Executive Vice President of the European Commission overseeing technological sovereignty.

Brussels’ efforts to establish „technological sovereignty“ have gained urgency as leaders worry about dependence on technologies from foreign suppliers, who, they say, could weaponize them against Europeans.

U.S. President Donald Trump criticized the EU for its technological regulations, while China has restricted the supply of minerals necessary for the sector.

Companies can now submit bids to build gigafactories that must have at least 100,000 state-of-the-art AI chips, making them roughly four times more powerful than the data processing centers currently operating in the European Union.

The current data processing capacity of the EU, provided by a network of 19 artificial intelligence centers from Finland to Spain, will more than double when these seven gigafactories are included.

Europe is far behind the U.S. and China in the most important sectors for the development of artificial intelligence, according to a 2025 estimate by the U.S. Federal Reserve. China has enormous electricity capacity for data centers, while the U.S. has the largest share of private investment in artificial intelligence.

Europe does not produce many of the millions of components needed for data centers, and electricity in the EU can cost two or three times more than in the U.S. and China, according to a European Commission report submitted to the European Parliament in June.

„European businesses and public authorities will continue to rely on AI providers from the U.S. at the expense of European service providers who are struggling to compete,“ the report states, noting that the top five cloud providers for the European bloc are all American.

„Dependence on hyperscale cloud and AI computing service providers, especially for highly critical use cases, will continue to expose data to the possibility of access by third countries and pose risks to service continuity, jeopardizing operational autonomy,“ the report states.

French company Mistral now operates one of the largest artificial intelligence data centers in the EU at its campus in Paris. Mistral develops the chatbot „Le Chat,“ but has not kept pace with American AI companies such as OpenAI, the maker of ChatGPT, and Chinese rivals such as DeepSeek.

While political leaders such as French President Emmanuel Macron have expressed alarm over Europe’s lack of domestic AI companies, there is also widespread concern across the continent about the economic disruption and privacy implications of this emerging technology.

The European Commission stated that AI products developed with the growing network of data centers will adhere to EU standards for data protection, safety, security, and ethics, writes the AP agency, noting that this possibly refers to its Digital Services Act and Digital Markets Act.

In June, 40 mayors from around the world—from cities such as Phoenix in the U.S. to Melbourne in Australia—signed an agreement to prevent the negative impact of building AI data centers on natural resources, energy prices, or climate goals, AP recalls.