EU Launches 'AI Gigafactories' Construction Plan with $11.5 Billion in Public Funding

The European Union has launched a tender, inviting companies to apply for building up to seven publicly funded artificial intelligence (AI) data centers, to advance the EU's strategy of reducing dependence on foreign technology.

On Thursday (30th), the European Commission announced that these facilities, dubbed 'AI Gigafactories,' will receive up to €10 billion (approximately $11.5 billion) in public funding from the EU and its member states, with the potential to leverage at least €20 billion in private investment.

The Commission stated that businesses and investors may bid for two types of projects:

- Four standard 'AI Gigafactories': each equipped with at least 75,000 AI chips, eligible for up to €500 million in public funding; - Three larger 'AI Gigafactories': each equipped with at least 100,000 AI chips, eligible for up to approximately €1 billion in public funding.

The first projects are scheduled to begin construction in the first quarter of 2027. Funding for subsequent expansions is still under negotiation, and the entire project will be implemented in two phases.

The EU views these 'AI Gigafactories' as a key pillar in achieving technological sovereignty, aiming to reduce reliance on key technology services from Silicon Valley.

The European Commission stated that, to support European startups and growing tech companies, parts of the procurement process may be restricted to European-based enterprises.

The Commission also emphasized that, under EU-U.S. trade agreements, it has signed letters of intent with AMD (AMD-US), NVIDIA (NVDA-US), and Qualcomm (QCOM-US) to ensure that bidding consortia can secure essential hardware such as AI chips.

This tender launch marks the latest step in the EU's regional technology strategy. However, it should be noted that only €2 billion in public funding has been secured so far, with the remainder dependent on approval in the EU's next budget cycle.

The plan's progress has been slow, and its funding scale is insufficient, especially when compared to large-scale investments in the U.S., Asia, and parts of the Middle East. Data shows that U.S. spending on data center construction exceeded $4 billion in April alone this year, with an annualized rate surpassing $50 billion.