EU lays out $11.4 billion for 7 AI gigafactories as it aims to catch up
with US and China
[July 31, 2026] By
SAM McNEIL
BRUSSELS (AP) — The European Union is offering 10 billion euros ($11.4
billion) in funding for firms to erect seven AI gigafactories as it
seeks to close the AI gap with U.S. and China, the 27-nation bloc's
executive said on Thursday.
The European Commission said it would like the public financing to draw
an additional 20 billion euros ($22.8 billion) in private investment.
“Access to the raw scale of computing power within AI gigafactories is a
strategic necessity for Europe as AI development accelerates,” said
Henna Virkkunen, the Commission executive vice president overseeing tech
sovereignty.
The efforts by Brussels to establish “ tech sovereignty ” have gained
urgency as leaders worry about dependence on technologies from foreign
providers, which they say could be “weaponized” against Europeans. U.S.
President Donald Trump has railed against the EU over its tech
regulations and China has limited the supply of minerals critical to the
sector.
Firms can now bid for contracts to build gigafactories that are planned
to have at least 100,000 cutting-edge AI chips, making them roughly four
times more powerful than the data centers currently running in the EU.
The EU's current computing power — delivered by a network of 19 AI data
centers from Finland to Spain — will more than double when these seven
gigafactories come online.
Europe lags far behind the U.S. and China in crucial sectors for the
development of AI, according to a 2025 assessment by the U.S. Federal
Reserve. China has an enormous electrical power capacity for data
centers while the U.S. bags the lion's share of private AI investment.
Europe doesn’t manufacture many of the millions of components needed for
data centers and electricity in the EU can cost double or triple what it
does in the U.S. and China, according to a Commission report presented
to European Parliament in June.
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A data centre is pictured in Frankfurt, Germany, Friday, Aug. 22,
2025. (AP Photo/Michael Probst, File)
 “European businesses and public
authorities will continue to rely on US AI providers to the
detriment of European service providers struggling to work at the
frontier,” said the report, which listed the bloc's top five cloud
service providers as all American. “Dependence on hyperscale cloud
and AI computing service providers, particularly for highly critical
use cases, will continue to expose data to third-country access and
carry risks to service continuity, endangering operational
autonomy.”
France's Mistral now runs the one of the largest AI data center in
the EU so far at its campus in Paris. Mistral makes the Le Chat
chatbot but it hasn't kept pace with American AI companies like
OpenAI, maker of ChatGPT, and Chinese rivals like DeepSeek.
While political leaders like French President Emmanuel Macron have
raised the alarm about Europe lacking homegrown AI companies, deep
anxieties run rife across the continent about the economic
disruption and privacy implications of the nascent technology.
The Commission said AI products developed with the growing network
of data centers will “follow EU standards on data protection,
safety, security and ethics,” perhaps referring to the bloc’s
Digital Services Act and its Digital Market Act.
In June, 40 mayors around the world signed a pact to curtail the
negative impact of the construction of AI data centers on the
natural resources, energy prices or climate targets of cities from
Phoenix to Melbourne.
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