The European Commission has opened a formal tender process to publicly finance up to seven AI gigafactories across the European Union, marking a significant step in Brussels' push to build sovereign infrastructure for training advanced artificial intelligence models. The facilities, which are large-scale computing centres equipped with specialised chips, are designed to handle the immense computational demands of next-generation large language models that process trillions of data points.
The initiative is part of a broader strategy to reduce the EU's reliance on foreign suppliers for cloud services and semiconductors, a vulnerability that has become increasingly apparent as the global race for AI dominance intensifies. Massive data centre projects are already well advanced in the United States and China, and European leaders have expressed concern about falling behind.
From Paris announcement to procurement launch
European Commission President Ursula von der Leyen first outlined the gigafactory plan at the AI Action Summit in Paris in February 2025, drawing a parallel with the CERN laboratory in Geneva as a model for collaborative European scientific infrastructure. Since then, the initiative has attracted significant interest from industry, with 76 potential consortia expressing preliminary interest in submitting proposals.
To accommodate this appetite while ensuring a reasonable geographical spread, the Commission has expanded its original target from four or five gigafactories to up to seven. Ten countries have expressed interest in hosting a facility: Germany, Italy, France, Poland, Czechia, Denmark, Finland, Greece, Portugal and Spain. Both single-country and multi-country consortia are possible, and Paris has already signalled its intention to go it alone.
However, the process has faced criticism for repeated delays, which some argue undermine the urgency of the Commission's own rhetoric about catching up with global competitors. The procurement has been split into two consecutive phases, with a staggered approach designed to build capacity gradually over the next six and a half years.
Funding constraints and private sector role
The phased approach is largely due to funding limitations. Initially, the Commission appeared committed to a €20 billion fund for the gigafactories, but it has since scaled back its financial commitments. The public share of the project has been reduced to roughly a third of the overall investment, with the remaining two-thirds expected to come from the private sector. Of the public portion, only half will be provided by Brussels, with the remainder coming from supporting EU member states.
As a result, Brussels is set to contribute approximately €5 billion, matched by another €5 billion from European governments, alongside around €20 billion in private investment. Under the current budget, however, the Commission can only commit €1 billion, with the rest expected to come from the next Multiannual Financial Framework (MFF), which remains the subject of intense negotiations among member states.
“We cannot pre-empt the decisions about the next MFF. We gave you our best estimate of how much money we would have from the next MFF to be able to support phase two,” a senior Commission official said.
In exchange for their public contribution, the EU and supporting member states will receive a proportionate share of compute access to allocate to public projects, research centres and AI labs of their choosing. All operating costs will fall on the private actors involved, with EU officials insisting the projects must be financially sustainable by developing their own commercial services, given that access to AI compute remains scarce and valuable.
Dependency on foreign chips remains a concern
While the gigafactories aim to build sovereign European infrastructure, the EU remains heavily reliant on foreign suppliers for specialised AI chips. To address this, the Commission has signed memoranda of understanding with three chipmakers: Nvidia, AMD and Qualcomm. Among the criteria for assessing tenders are measures to avoid potential lock-in effects from suppliers.
“We're very aware that we wish to build up Europe's capacity, but we also need to recognise, at the same time, that we want to do some AI right now. So, it's about striking the right balance,” a senior EU official said.
Massive infrastructure projects of this kind have attracted criticism in the past, as they tend to favour wealthier member states. The current list of interested countries includes both large economies and smaller ones, but the final allocation will depend on the quality of proposals and the ability to secure co-financing. The Commission's decision to expand the number of gigafactories may help spread benefits more evenly, but the risk of concentration remains.
The tender process comes amid broader European efforts to assert digital sovereignty, including regulatory actions such as the €890 million fine against Google and ongoing debates over digital rights, such as the Chat Control proposal. The success of the gigafactory initiative will depend not only on funding and technology but also on the EU's ability to coordinate among member states and attract private investment in a highly competitive global market.
