EU unveils €10B plan to build massive AI gigafactories to rival US and China

The European Union has announced to build seven AI gigafactories with a €10 billion ($11.5 billion) public investment plan.

The new plan will mark a massive escalation in its quest for "tech sovereignty," as the EU steps up efforts to close the technology gap with the U.S. and China.

The Commission said on thursday, that it is offering €10 billion in public funding  supported by member state with the explicit goal of unlocking at least €20 billion in private investment.

After a new revised plan, the total number was increased from five gigafactories to seven following strong interest from EU countries.

Each gigafactory is expected to pack at least 100,000 cutting-edge AI chips, making them roughly four times more powerful than the data centers currently operating across the bloc.

While the US dominates private AI investment and China commands immense data center power and energy capacity, Europe has struggled to scale homegrown frontier labs.

Moreover, Brussels is also increasingly worried about relying on American hyperscale cloud providers and foreign hardware.

Officials have warned that dependence on external tech could be "weaponized"—compounded by geopolitical friction over trade, data security, and critical mineral restrictions.

The new facilities will combine advanced AI processors, software, cloud technology, high-speed connectivity and data centres.

EU tech chief Henna Virkkunen said in a statement, "Access to the raw scale of computing power within AI Gigafactories is a strategic necessity for Europe as AI development accelerates."

The tender process will close on November 12 and the Commission is expected announce successful bidders in early 2027, with the facilities becoming operational within 18 months of contract signing.

In addition to that, AMD, Nvidia and Qualcomm have signed letters of intent with the Commission to provide chips to groups involved in the gigafactory projects.