The European Commission has officially launched a tender for the construction of seven artificial intelligence gigafactories within the EU. This initiative, with an estimated total investment of approximately 30 billion euros, aims to reduce Europe's digital dependence on the US and China by establishing sovereign infrastructure for training advanced AI models.
However, the ambitious plan already faces challenges related to budget financing and technological independence.
What are AI Gigafactories and what is their context?
AI gigafactories are large-scale computing centers equipped with the latest specialized chips. Their primary purpose is to provide the computational power needed to train the next generation of artificial intelligence technologies, including large language models (LLMs) capable of processing trillions of data units.
This project represents a key component of the EU's strategy to ensure technological sovereignty. The global race to create the most powerful AI models, which hold both economic and defense significance, has already led to the active deployment of similar infrastructure in the United States and China.
In response, European Commission President Ursula von der Leyen announced the plan to establish European gigafactories back in February 2025 at the AI Action summit in Paris. She drew parallels with the successful model of scientific cooperation implemented at CERN.
Funding: Ambitions and Budgetary Realities
The project's total investment is estimated at 30 billion euros, but the funding structure has undergone significant changes. The European Commission initially spoke of 20 billion euros in public funds, yet the share of public funding was ultimately reduced to approximately one-third of the total amount.
The distribution of funds is as follows:
- Approximately 5 billion euros will be allocated by Brussels (the European Commission);
- Around 5 billion euros will be contributed by the governments of supporting EU member states;
- The remaining 20 billion euros are expected to be provided by private investors.
However, within the current EU budget, only 1 billion euros can be committed. The remaining funds are anticipated from the next Multiannual Financial Framework (MFF), whose terms are still subject to intense interstate negotiations.
In exchange for public investments, the EU and participating member states will receive a proportional share of access to the computing power. These resources can be directed towards government projects, research centers, and AI laboratories at the discretion of the authorities.
All operational costs, however, will be borne by private operators, who must ensure the financial sustainability of the projects through service commercialization, considering the high global demand and the scarcity of AI capacity.
Project Geography and Industry Interest
The initiative has generated significant interest within the industry, with 76 companies expressing preliminary interest in submitting applications. To meet private sector demand and ensure equitable geographical distribution of infrastructure, the European Commission expanded its initial plans from 4–5 to 7 gigafactories.
Ten countries have already declared their desire to host these facilities: Germany, Italy, France, Poland, Czechia, Denmark, Finland, Greece, Portugal, and Spain. The format of participation can be either national or multinational (in the form of consortia), although France has already expressed its intention to act independently.
Challenges and Criticism
Despite its scale, the project faces criticism across several areas:
1. Missed Deadlines: The European Commission is criticized for repeatedly delaying the initiative's implementation, which undermines the declared urgency of catching up with the US and China.
2. Budgetary Imbalance: There is a risk that large-scale infrastructure projects will ultimately only be realized in member states with the largest budgets, potentially widening the technological gap within the EU itself.
3. Reliance on Foreign Chips: Despite striving for sovereignty, the EU still depends on foreign hardware suppliers.
To mitigate this risk, the European Commission has signed Memoranda of Understanding with three major chip manufacturers: Nvidia, AMD, and Qualcomm. Furthermore, special measures to prevent technological dependence on a single supplier have been included in the application evaluation criteria.
"We fully understand that we want to build up European capacities, but at the same time, we must acknowledge that we need to address AI right now. It's about finding the right balance," the European Commission noted.
Implementation Timeline
The procurement process is divided into two consecutive phases, allowing for a gradual increase in capacity over the next six and a half years. According to the current schedule, successful consortia are expected to begin physical construction of the gigafactories in early 2027, with full commissioning planned for mid-2028.
