EU bets €10bn on AI 'gigafactories' to catch up with US and China
The European Commission has opened bidding for seven large-scale AI computing facilities, backed by €10bn ($11.4bn) in public funding, as the bloc tries to close a widening gap with the United States and China in AI.
Text by Martti Asikainen, 5.8.2026 | Photo by EC – Audiovisual Service / Claudio Centonze
The European Commission has opened bidding for seven large-scale AI computing facilities, backed by €10bn ($11.4bn) in public funding, as the bloc tries to close a widening gap with the United States and China in artificial intelligence.
The Commission said on 30 July it would support the initiative with up to €10 billion in EU and national funding, which it expects to unlock at least €20 billion in private investment across the bloc. Including that private money, the Commission said total investment could exceed €30 billion.
The plan started smaller. The original proposal called for five gigafactory sites, but this was expanded to seven after stronger-than-expected interest from EU member states.
Henna Virkkunen, the Commission’s executive vice-president for tech sovereignty, said computing power at this scale was now essential. “Access to the raw scale of computing power within AI gigafactories is a strategic necessity for Europe as AI development accelerates,” she said.
Bigger than anything Europe has built
Each site is intended to be enormous by Europe’s current standards. Every gigafactory is planned to house at least 100,000 advanced AI chips, making it around four times more powerful than any data centre currently operating in the EU. The seven new sites will add to an existing network of 19 smaller AI data centres already running in EU countries, from Finland to Spain, more than doubling the bloc’s total computing capacity once they come online.
The facilities will combine advanced AI processors, cloud infrastructure, software, high-speed networking and energy-efficient data centres, and are meant to give startups, researchers, businesses, universities and public agencies access to large-scale computing power for training, fine-tuning and running AI models.
The Commission said the process is now open to bidders. Consortia made up of technology providers, cloud service providers, public entities and investors can apply, with the tender process closing on 12 November. The Commission expects to announce successful bidders in early 2027, and facilities are meant to become operational within 18 months of contract signing. Chipmakers AMD, Nvidia and Qualcomm have signed letters of intent with the Commission to supply chips to the winning groups.
One bid reportedly in the running comes from Finland. Finnish public broadcaster Yle has reported that a Nokia-led consortium is discussing a gigafactory site in Oulu, a northern Finnish city where Nokia already runs a large research and manufacturing campus. That report predates the expansion from five to seven sites noted above. Nokia has confirmed it is involved in talks about a Finnish site but has not confirmed Oulu specifically, nor a Finnish MP’s estimate that the project could be worth up to €5bn. The Commission has not yet said where any of the seven facilities will be located.
Fear of dependence
The push reflects growing unease in Brussels about relying on non-European technology. Concerns about dependence on foreign providers have intensified, with some officials warning such dependence could leave Europe exposed to outside pressure. That anxiety has sharpened amid trade tension between the EU and the US over tech regulation, and Chinese restrictions on critical minerals used in the sector.
A Commission report presented to the European Parliament in June set out the scale of the problem. Europe manufactures few of the millions of components needed for data centres, and electricity in the EU can cost double or triple what it does in the US and China. The report also noted that the bloc’s five largest cloud service providers are all American, warning that European businesses and public authorities will keep relying on US AI providers to the detriment of European competitors, and that such dependence on foreign cloud and computing providers risks exposing data to outside access and undermining operational autonomy.
The Commission said any AI products developed at the new sites would have to comply with existing EU rules. AI technologies developed in the gigafactories will follow EU standards on data protection, safety, security and ethics.
Falling behind
The scale of the challenge is significant. A 2025 assessment by the US Federal Reserve found Europe lagging far behind the US and China in crucial areas of AI development, noting that China has vast electrical power capacity for data centres while the US attracts the bulk of private AI investment.
Europe’s most prominent home-grown AI company has struggled to keep pace with rivals. France’s Mistral currently runs the largest AI data centre in the EU, at its campus in Paris, and makes the Le Chat chatbot, but has not matched the pace of American firms such as OpenAI or Chinese competitors such as DeepSeek. French President Emmanuel Macron has previously warned about Europe’s shortage of major domestic AI companies.
Whether the gigafactories close that gap will not be clear for some time. Bidding closes on 12 November, with the Commission expected to name winning consortia — and their locations — in early 2027.
