The Commission plans to fund construction of 13 AI factories across Europe.

The European Union has tabled an ambitious plan to boost its position in the global artificial intelligence (AI) race, announcing a €200 billion “AI Continent” action plan aimed at closing the gap with AI frontrunners like the United States and China.

Central to the initiative is a €20 billion investment in building five AI gigafactories and 13 AI factories scattered across the continent — high-powered data and computing hubs that will serve as the backbone for European AI development.

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The gigafactories would be equipped with 100,000 advanced processors each, surpassing the power of current AI factories by fourfold. These facilities aim to drive “moonshot” innovations in fields such as healthcare, robotics, and biotech.

The European Commission estimates each gigafactory will cost €3–5 billion.

To fund this initiative, the InvestAI facility will mobilize €20 billion, leveraging both public funds and private capital through the European Investment Bank.

Environmental and legal concerns

Three are two big questions to resolve before the project kicks off.

The massive energy demands of these facilities will certainly raise environmental concerns. While the EU plans to power them largely with renewable energy and implement water recycling systems, campaigners warn they could still undermine the bloc’s climate targets. In 2024, 47% of EU electricity came from renewable sources.

Secondly, while the EU remains committed to its AI Act — a landmark regulation designed to mitigate risks of AI — the Commission is now considering ways to relax it in order to streamline implementation. The law, passed in 2024, won’t fully apply until 2027, but Brussels is launching a consultation on potential simplifications to reduce regulatory burdens and accelerate innovation.

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The U.S. is also flexing its AI muscles with a similar program, for which the administration of President Donald Trump is looking to mobilize half a trillion dollars to build AI infrastructure.

The AI race currently unfolding before our eyes is unique of its kind – nations no longer share their AI knowledge and technology with allies; everyone is against everyone.

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