The European Union is targeting multi-billion-euro “gigawatt factories” to boost its AI industry and catch up with the U.S. and China. Described as “dynamic ecosystems” combining computing power, data, and talent, these gigafactories are designed to be four times more powerful than the largest existing AI factories, each requiring €3-5 billion in investment.

Despite having 30% more AI researchers per capita than the U.S. and around 7,000 AI startups, Europe faces a major obstacle in limited computing capacity, along with slower legislation, higher energy costs, and grid modernization needs. To address this, the EU has allocated €10 billion for 13 AI factories and a starting point of €20 billion for the gigafactories, marking the “largest public investment in AI in the world.”

UBS estimates these facilities could add 1.5-2 GW of capacity, boosting Europe’s total computing capacity by about 15% (compared to the U.S.’s one-third global share). While the EU has received overwhelming interest, significant private investment is still needed. A key challenge is the immense power consumption, with each gigafactory requiring at least 1 gigawatt, necessitating major investment in power generation and grid infrastructure. The first EU AI factory is expected to be operational soon, with gigafactories following later, potentially powered by US AI chips.

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Source: https://www.cnbc.com/2025/07/29/europe-sets-its-sights-on-multi-billion-euro-gigawatt-ai-factories.html