EU launches €30B plan to build seven AI gigafactories

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BRUSSELS — The EU on Thursday fired the starting gun on plans to fund seven multi-billion-euro computing hubs to train artificial intelligence models in Europe.

The launch of an official process for seven industry consortia willing to build AI “gigafactories” fulfills a promise made by European Commission President Ursula von der Leyen at an AI summit last year to help Europe catch up in the race on AI.

AI companies need massive amounts of compute power to train advanced models, which is fueling the effort to build out specialized data centers. The EU’s goal is to support four smaller data centers, each underpinned by 25,000 to 75,000 specialized AI chips, and three larger ones, each powered by 40,000 to 100,000 chips.

The Commission will select the winning bids by early next year, after which companies will have 18 months to build them. Those angling for a smaller project could receive up to €1 billion in public funding, while the larger projects could receive up to €2 billion.

The EU has put in place “the largest public-private partnership” to ensure funding, a senior Commission official told reporters Thursday. The Commission has earmarked €1 billion so far and foresees a further €4 billion under the next long-term EU budget — although it admitted the latter amount remains uncertain given ongoing budget talks.

Public funding should not exceed 35 percent of the total investment — the Commission says that combined with private funds, the investment could amount to €30 billion.

EU legislators and industry observers have raised questions about the plans , including whether there will be sufficient demand from AI companies for the compute power generated by the data centers, and whether they will perpetuate dependency on foreign tech given that advanced computing chips are all U.S.-made.

The senior Commission official rebutted that criticism, saying the current infrastructure is already “saturated in demand.”

The official acknowledged that U.S. AI chip providers such as Nvidia are “omnipresent,” but said other providers could help with the next phase of upgrading the facilities.

To win support, consortia need backing from at least one national government. Germany, Greece, Portugal, Italy and Spain are backing efforts to build the larger data centers, while Czechia, Denmark, Finland, France and Poland are vying for the smaller size.

The projects may have to contend with local opposition, amid concerns about the rising power and water demands of data centers accompanying the global AI boom.

The Commission official said: “We are demanding that the bidders document … how they are going to implement this technology in a sustainable and energy-efficient way.”