EU Prepares Seven AI Gigafactories to Chase the US and China

JAKARTA - The European Union has opened a tender to finance up to seven AI gigafactories in Europe. This project is being prepared to build its own AI infrastructure, chasing the United States and China, while reducing dependence on foreign suppliers.

Euronews, quoted on Friday, July 31, reported that the tender was opened by the European Commission as Brussels sought to build a sovereign infrastructure to train advanced AI models.

The Gigafactory AI is a large-scale computing facility equipped with special and highly sophisticated chips. This facility is used to train the next generation of AI technology, including large language models that require very large amounts of data processing.

This move is part of the EU's push for technological sovereignty. The goal is to reduce dependence on foreign suppliers for cloud services and chips.

Global competition in the field of AI is not only about who has the most powerful model. States and companies are also scrambling to build data centers and large computing facilities that are the backbone of AI development.

In the United States and China, giant data center projects are already underway. The European Union wants to build its own capacity in AI infrastructure.

European Commission President Ursula von der Leyen previously announced plans to build an AI gigafactory in Europe at the AI Action Summit in Paris in February 2025. The ambition is to emulate the success of the CERN laboratory in Geneva.

The industry's interest is quite large. A total of 76 potential consortia expressed initial interest in submitting project proposals.

Because of this, the European Commission is expanding its initial plan of four or five gigafactories to up to seven. The Commission also wants the infrastructure to be spread more evenly geographically.

According to Euronews, the European Commission has been criticized for repeatedly delaying the initiative. The delay is considered to slow down Europe's steps when they talk about the urgency of pursuing the US and China.

The procurement process is now divided into two phases. The phased approach is designed to build capacity over the next six and a half years.

The main problem is funding. Initially, the European Commission seemed to prepare 20 billion euros for the gigafactory. However, the commitment to public funding was later cut.

The portion of public funding is now about a third of the total investment. The remaining two-thirds are expected to come from the private sector.

Under the scheme, Brussels will contribute around 5 billion euros. Other European governments add around 5 billion euros, while the private sector is expected to invest around 20 billion euros.

However, in the current budget, Brussels can only commit 1 billion euros. The rest is expected to come through the next Multi-Annual Financial Framework, MFF.

The MFF is the EU's long-term budget framework. Currently, the figure is still being negotiated by member states.

"We cannot prejudge the decision on the next MFF. We give our best estimate of how much money we will have from the next MFF to be able to support the second phase," a senior European Commission official said.

In return for public contributions, the EU and supporting countries will get access to computing. Access can be given to public projects, research centers, and AI laboratories of their choice.

All operational costs will be borne by private actors. EU officials stressed that the project must be financially sustainable by developing its own commercial services.

This infrastructure project has also been criticized for being more beneficial to member countries with the largest financial capabilities.

Ten countries expressed interest in hosting a gigafactory, namely Germany, Italy, France, Poland, Czech Republic, Denmark, Finland, Greece, Portugal, and Spain.

A single-country or multi-country consortium is possible. France has already signaled its desire to go it alone.

Another criticism concerns chip supplies. Although it wants to build a sovereign AI infrastructure, the EU still relies heavily on foreign suppliers for specialized AI chips.

The European Commission has signed a memorandum of understanding with Nvidia, AMD, and Qualcomm. In the tender assessment, the Commission also included steps to avoid excessive dependence on a single supplier.

"We are very aware that we want to build European capacity, but at the same time we also need to recognise that we want to run some AI now. So, it's about finding the right balance," a senior EU official said.

The project that passed the selection is expected to start being physically built in early 2027. The AI gigafactory facility is targeted to operate by mid-2028.