EU opens AI gigafactory race to cut reliance on US cloud

The European Union has initiated the bidding process for as many as seven AI “gigafactories” as part of its procurement program aimed at mobilizing more than 30 billion euros in public and private investments and enabling European firms to tap into the computing power they need to develop cutting-edge AI models.

Brussels wishes to have more of the required hardware for forthcoming AI technologies, instead of relying on the cloud offerings of U.S. companies.

This decision arrives at a time when computing capability has turned into one of the major impediments in this industry. Advanced AI models can only be trained using clusters containing tens of thousands of top-notch accelerators, and officials in Europe understand that the existing public infrastructure has come under heavy strain.

The initiative is part of a larger plan by the Commission called the AI Continent initiative, aimed at achieving a sovereign AI computing capacity.

Furthermore, the initiative shows a trend that has been identified by Stanford University’s 2026 AI Index, revealing that countries around the world are beginning to treat AI infrastructure as a strategic national asset within the same terms as semiconductors, energy, and data.

Why owning the hardware became the whole argument

In the words of a senior official at the European Commission, Europe’s problem can be stated in one sentence:

“The current infrastructure is saturated in demand.”

What this means is that the biggest challenge to AI in Europe today is not the research talent available but rather the lack of computing capacity.

This assertion reinforces Stanford’s conclusion that the development of frontier AI technology tends to favor entities that possess big budget to set up and run huge GPU farms.

According to the AI Gigafactories plan, every site will have a capacity of installing as many as 100,000 cutting-edge AI processors enhanced with ultra-modern networks, cloud software, reliable sources of electricity, and state-of-the-art cooling technology for the purposes of training and utilizing gigantic models.

Europe has already established 19 AI Factories connected to public supercomputers. The objective of these gigafactories is to provide an alternative to those facilities by creating bigger private-led computing plants.

The aim has been to ensure that the development of AI happens within the already established European regulatory and data-governance frameworks. The initiative also corresponds to the EU’s Coordinated Plan on Artificial Intelligence which has been aimed at putting together the investments of different member states since 2018 instead of pursuing fragmented national efforts.

How the €30 billion actually adds up

The funding scheme uses state money in order to attract more investment from the private sector.

In total, the funding is expected to include €10 billion from national and EU sources, which should leverage €20 billion from private investors, with public financing limited to just 35% of project expenses in general.

Some of the funding will still depend upon forthcoming negotiations regarding the EU budget. The European High-Performance Computing Joint Undertaking (EuroHPC JU) will manage the competitive selection process, maintaining the EU strategy of using public funding to attract private investment in critical technologies.

Two lots, and a lot of chips

The tender is divided into two categories. On the one hand, one can back up to four medium-sized gigafactories. On the other hand, the other can support as many as three large facilities. Depending on the project, the amount of funding available from both the EU and national governments can range from €1 billion to €2 billion.

In terms of smaller sites, they should be able to implement anywhere from 25,000 to 75,000 AI processors in an efficient way while the largest one can be able to exceed 100,000. Germany, Italy, Greece, Portugal and Spain are among those countries that are displaying interest in running the major facilities.

A cluster of this magnitude would allow an EU gigafactory to be ranked among the biggest AI training setups from some of the largest U.S. corporations running today, yet it would still fall short of the multi-thousand GPU setups planned by companies like xAI. The analogy shows Brussels’ goal of creating technologies that are able to train cutting-edge AI models, instead of regular research supercomputers.

The dependency Europe cannot design away

Establishing independent AI infrastructure alone cannot reduce Europe’s dependence on foreign manufacturers of semiconductors.

After the EU-U.S. trade agreement reached in July of 2026, the Commission has signed letters of intent with AMD, Nvidia, and Qualcomm to increase access to hardware in relation to the gigafactory projects.

However, officials are quite realistic about this development.

Future hardware upgrades are expected to involve a larger number of suppliers due to increased competition, but chips alone will not solve the problem. The International Energy Agency has also highlighted the fact that AI data centers are contributing towards the increasing global demand for electricity and hence there exist the need to focus on reliable sources of electricity, sufficient grid capacity and cooling systems along with advanced processors.

The clock is now running

Applications close on 12 November 2026. Awards based on evaluations conducted by EuroHPC are expected to be presented in early 2027. The selected projects are expected to begin operations approximately 18 months after signing a contract.

Henna Virkkunen, Executive Vice-President of the European Commission for Tech Sovereignty, Security, and Democracy, declared the launch “a milestone” with regard to the AI aspirations of the bloc.

The EU’s interest in the gigafactories is not limited to just increasing the cloud capacity of the economies, as there is a view that these facilities may provide the much-needed infrastructure for the faster deployment of AI in sectors such as manufacturing, healthcare, transportation, and public services.

However, the analysis by OECD shows that success in the adoption of AI across Europe is not uniform, which means that the €30 billion of additional computing power is only a small piece in the important battle for economic competitiveness.

The smartest crypto minds already read our newsletter. Want in? Join them.