EU proposes €10 billion to build seven AI "gigafactories"

The European Commission has proposed a €10 billion public funding package to support construction of seven large-scale "gigafactories" for artificial intelligence compute across the European Union, aiming to narrow the gap with the United States and China. The plan foresees that the public money should attract about €20 billion in private investment.

"Access to raw compute power through AI gigafactories is a strategic necessity for Europe, as the development of artificial intelligence is accelerating," said Henna Virkkunen, executive vice-president of the European Commission responsible for overseeing technological sovereignty.

Technical targets and capacity

Companies are invited to bid to build the facilities, each of which must provide at least 100,000 state-of-the-art AI chips — roughly four times the computing power of the data centres currently operating in the EU. Once the seven gigafactories are online, the commission expects the bloc's processing capacity to increase to more than twice the present level supported by a network of 19 AI data centres from Finland to Spain.

A 2025 US Federal Reserve assessment cited by Brussels found that Europe lags the US and China in key areas of AI development: China benefits from large-scale power availability for data centres, while the United States leads in private-sector investment. The commission's June report to the European Parliament also highlighted that Europe produces relatively few of the millions of components needed for data centres and that electricity costs inside the EU can be two to three times higher than in the United States and China.

"European businesses and public authorities will continue to rely on American AI suppliers at the expense of European service providers struggling to do so," the report says, noting that the five largest cloud providers serving the bloc are all American. "Dependence on hyperscale cloud and compute service providers, particularly for highly critical use cases, will continue to expose data to third‑party access possibilities and will pose a risk to service continuity, compromising operational autonomy," it adds.

European start-ups are already building AI capacity: the French company Mistral operates one of the EU's largest AI data centres at its Paris campus and produces the chatbot Le Chat, but it still trails major US and Chinese rivals such as OpenAI and DeepSeek. Political leaders including French President Emmanuel Macron have warned about the shortage of domestic AI champions. The commission also said AI products developed on a growing European data-centre network will be expected to comply with EU rules on data protection, security and ethics, likely referring to the Digital Services Act and the Digital Markets Act. Observers noted that major investments in AI worldwide could also have macroeconomic effects, including upward pressure on inflation in the United States.

Photo: Tanapong Sungkaew / Alamy / Alamy / Profimedia