EU offers $11.4 billion for AI gigafactories

The European Union is offering 10 billion euros ($11.4 billion) in public funding for firms to build seven AI gigafactories, part of a push to narrow its AI gap with the U.S. and China. The European Commission wants the financing to attract an additional 20 billion euros ($22.8 billion) in private investment as Brussels seeks greater tech sovereignty and less dependence on foreign providers.

The planned facilities would each have at least 100,000 cutting-edge AI chips, making them roughly four times more powerful than data centers currently operating in the EU. The bloc’s existing computing capacity, supplied by a network of 19 AI data centers from Finland to Spain, is expected to more than double once the gigafactories are built.

Europe remains behind in key areas needed for AI development, with China holding major electrical power capacity for data centers and the U.S. attracting the largest share of private AI investment. A Commission report warned that European businesses and public authorities risk continued reliance on U.S. AI and cloud providers, exposing data and critical services to third-country access and continuity risks.

The Commission said AI products developed through the expanded network will follow EU standards on data protection, safety, security and ethics. The initiative also lands amid broader concern over the environmental and energy impact of AI data centers, with 40 mayors signing a pact in June to limit harm to natural resources, energy prices and climate targets.