Germany is taking a bold step to strengthen Europe's position in the global artificial intelligence race. The federal innovation agency SPRIND has launched a €125 million competition, dubbed 'Next Frontier AI,' to fund companies that could eventually become Europe's answer to OpenAI or DeepSeek.
The initiative comes as governments across the continent grow increasingly concerned about dependence on American and Chinese AI firms. Jano Costard, SPRIND's head of challenges, told Euronews Next: 'Germany is leading this because we have no time to waste in waiting for other actors to get in that space. A competition globally is not waiting. So we need to act now. And that's why we do this in a European manner.'
Three-Stage Funding Model
SPRIND's competition will unfold over 24 months in three stages. In the first phase, up to ten teams can each receive up to €3 million. Up to six teams will advance to the second stage, with funding of up to €8 million each. In the final stage, up to three teams can receive up to €15.5 million each. Costard expects 'several hundred to thousands of applications' from across Europe.
While €125 million may seem modest compared to the billions poured into AI by the US and China, Costard emphasizes that this is just the beginning. 'The 125 million euros that we provide are only the first step,' he said. 'It is the very explicit goal of this challenge to be able to unlock billions in additional funding. So what we use the 125 million for is kind of building the tech to a stage where we really see the potential of these new AI paradigms that we are after.'
Europe's Strategic Focus
Costard argues that Europe cannot compete by simply improving existing AI systems. 'We cannot try to compete with today's Anthropic and their products,' he said. 'We need to rely on our ability to create new paradigms, new capabilities for AI that the current methods cannot develop.'
The initiative is also tied to broader European debates about technology sovereignty and startup growth. European policymakers and founders have increasingly argued that promising startups often struggle to scale in Europe and eventually move to the US. In March, the European Commission formally proposed the EU Inc, a single company law across the continent.
Costard agrees that a more borderless European startup environment would help, but he stresses that public funding must become faster and less cumbersome. According to Costard, Europe's best chance may lie in its own strengths, such as industrial data, manufacturing know-how, and privacy-focused AI. 'We don't lack in the research pedigree,' he said.
As Europe seeks to build its own frontier AI capabilities, initiatives like this could help the continent carve out a distinct path in the global AI landscape. For more on European innovation, see our coverage of Croatia's first commercial robotaxi service in Zagreb.
