The European Union announced Thursday it will offer 10 billion euros, about 11.4 billion dollars, in public funding to support the construction of seven AI gigafactories across the bloc, as Brussels tries to close a widening artificial intelligence gap with the United States and China.
The European Commission said the public financing is designed to draw in an additional 20 billion euros, roughly 22.8 billion dollars, in private investment, bringing the total planned investment in the program to around 30 billion euros. The number of planned sites was raised from an initial five to seven gigafactories after what the Commission described as strong interest from EU member states in hosting the facilities.
Henna Virkkunen, the Commission’s executive vice president overseeing tech sovereignty, said access to the raw scale of computing power within AI gigafactories is a strategic necessity for Europe as AI development accelerates globally. Firms will now be able to bid for contracts to build the facilities, each of which is planned to house at least 100,000 cutting edge AI chips, making them roughly four times more powerful than the data centers currently operating across the EU.
The bloc currently operates a network of 19 AI data centers stretching from Finland to Spain, and officials say that network’s overall computing capacity will more than double once the seven new gigafactories come online. The Commission’s tender process for the projects is set to close on November 12, with successful bidders expected to be announced in early 2027 and the facilities becoming operational within 18 months of contracts being signed.
Europe has lagged behind both the United States and China in several areas critical to AI development, including access to private capital and cheap electricity. US private investment dominates global AI infrastructure spending, while China benefits from enormous domestic electricity generation capacity dedicated to data centers. According to a Commission report, electricity costs in the EU can run two to three times higher than in the US or China, a gap that has made it harder for European firms to compete on the cost of running large scale computing operations.
Chipmakers have already begun lining up around the initiative. AMD, Nvidia and Qualcomm have signed letters of intent with the Commission to supply processors for the gigafactory projects, signaling early industry buy-in even before contracts are formally awarded.
The Commission said AI products and services developed using the expanded network of data centers will be required to follow EU standards on data protection, safety, security and ethics, citing the bloc’s existing Digital Services Act and Digital Markets Act as the legal backbone for those requirements.
Sources: Yahoo Finance/AP, WSLS/AP, TechRadar