EU launches €10 billion plan for seven AI gigafactories to close tech gap with US and China

The European Commission announced on Thursday a call for tenders to construct seven artificial intelligence gigafactories across the European Union, backed by €10 billion ($11.5 billion) in public funding, with the goal of attracting at least €20 billion in private investments. The initiative is part of the bloc's broader effort to reduce its reliance on external technology providers and strengthen its position in the global AI race.

The Commission said that the number of planned gigafactories was increased from five to seven following strong interest from EU member states. The facilities will combine advanced AI processors, software, cloud technology, high-speed connectivity and data centres, and will complement the existing 19 AI factories already operating in various EU countries.

According to the Commission, the funds will be collected and distributed by the European High Performance Computing Joint Undertaking (EuroHPC JU), an entity launched in 2020 to develop a world-class supercomputing ecosystem by pooling resources from the EU, European countries and private partners. Of the total, €10 billion will come from the EU and member states, while private investors are expected to contribute the remaining €20 billion.

Consortia and special purpose vehicles composed of technology providers, cloud service providers, public entities and investors are eligible to apply for funding. The tender process will close on November 12, with successful bidders expected to be announced in early 2027. The facilities are slated to become operational within 18 months of contract signing.

Chipmakers AMD, Nvidia and Qualcomm have signed letters of intent with the Commission to provide chips to groups involved in the gigafactory projects.

EU tech chief Henna Virkkunen stressed the strategic importance of the initiative, stating that "access to the raw scale of computing power within AI gigafactories is a strategic necessity for Europe as AI development accelerates." She described the construction of the facilities as "a milestone" for the bloc's technological sovereignty.

The Commission said the scheme will expand Europe's AI computing capacity and provide start-ups, scale-ups, small and medium-sized enterprises, industry, academia and public authorities with access to advanced infrastructure.

Analysts note that the EU currently operates 19 data centers located between Spain and Finland, underscoring the bloc's reliance on non-European technology providers, particularly from the US and China. The new gigafactories are intended to address that dependency and bolster Europe's competitive position in the global AI landscape.