EU Pledges €10B for Seven New AI Gigafactories

Europe just made its most concrete move yet to close the AI infrastructure gap separating it from the United States and China. The European Union invited companies to apply to build as many as seven AI data centers across Europe backed by public funds, with the facilities, called AI Gigafactories, receiving €10 billion ($11.5 billion) from the EU and member states, according to Bloomberg's reporting on the announcement.

The European Commission is hoping the public funding draws roughly twice as much in private investment on top of it, targeting at least €20 billion in additional capital. European Commission executive vice president Henna Virkkunen, who oversees tech sovereignty, framed the stakes directly: "Access to the raw scale of computing power within AI gigafactories is a strategic necessity for Europe as AI development accelerates," according to reporting from The News.

The plan's scope expanded meaningfully during development. The original proposal called for five gigafactories, but the Commission increased that number to seven following strong interest from EU member states, according to The News's reporting. Each gigafactory is expected to house at least 100,000 cutting-edge AI chips, roughly four times more powerful than the data centers currently operating across the bloc. The EU's current computing power, delivered by a network of 19 AI data centers stretching from Finland to Spain, will more than double once these seven gigafactories come online, a buildout worth understanding alongside our own coverage of similar-scale investments like Meta's $13 billion Alberta data centre and Meta's $50 billion Louisiana expansion.

The competitive gap this plan is trying to close is genuinely significant. Europe lags far behind the U.S. and China in critical AI infrastructure sectors, according to a 2025 assessment by the U.S. Federal Reserve cited in reporting from the Associated Press. China commands enormous electrical power capacity for data centers, while the U.S. captures the lion's share of private AI investment, leaving Europe struggling to scale homegrown frontier labs despite having genuine AI talent and research history.

The Commission specified that AI products developed using this growing network of data centers will "follow EU standards on data protection, safety, security and ethics," a likely reference to the bloc's Digital Services Act and Digital Market Act, according to the Associated Press report. France's Mistral currently runs one of the largest AI data centers in the EU at its Paris campus, though the company has notably struggled to keep pace with American labs like OpenAI and Chinese rivals, a competitive gap we've covered in our reporting on Kimi K3's recent open-weight release and the pricing pressure it's putting on Western AI labs broadly.

Not everyone is convinced the funding picture is as settled as the headline figure suggests. According to analysis from Crypto Briefing, no concrete €10 billion commitment has actually been confirmed as a single unified budget line specifically for these seven facilities. The funding is instead spread across multiple programs, budget cycles, and public-private structures, each carrying its own approval process and political dynamics, with the EU's next major budget cycle beginning around 2028 likely determining whether the program receives sustained long-term funding.

This EU investment is worth watching closely for any business operating in Europe or handling European customer data, since it signals a genuine, government-backed push toward domestic AI infrastructure that keeps data processing and model development within EU regulatory boundaries.

For businesses evaluating AI infrastructure partners with European operations, this buildout could eventually offer a genuinely competitive, EU-compliant alternative to routing AI workloads through American hyperscalers, though the funding uncertainty flagged by analysts means this remains a multi-year bet rather than an immediate infrastructure option.

The European Union is offering €10 billion in public funding for companies to build seven AI gigafactories, aiming to close the AI infrastructure gap with the U.S. and China, with each facility housing at least 100,000 cutting-edge AI chips. The Commission hopes the public funding draws an additional €20 billion in private investment, and all facilities will follow EU data protection and safety standards. Analysts note the funding is spread across multiple budget cycles and programs, meaning the full commitment isn't yet confirmed as a single guaranteed pool of capital.