The EU has launched its most aggressive initiative yet to establish itself as a contender in the global AI race. On Wednesday, the European Commission, the bloc’s executive arm, outlined the key action of its AI Continent Action Plan, which aims to narrow the widening technological gap with the United States and China in this critical domain.
The centerpiece of the EU’s strategy involves developing a network of AI gigafactories – computing facilities equipped with approximately 100,000 advanced AI chips each, four times more than current AI factories. The EU has committed to mobilizing €200 billion ($219 billion) in AI funding, including a €20 billion fund dedicated to establishing up to five gigafactories.
However, these figures appear limited, compared to initiatives from global competitors. A consortium including Microsoft, OpenAI, and Nvidia recently announced Stargate, a $100 billion AI data center project with potential investment growth to $500 billion. Meanwhile, Chinese companies like DeepSeek have demonstrated the ability to develop advanced AI models despite restricted access to cutting-edge chips.
To accelerate development, the EU is pursuing public-private partnerships while introducing a Cloud and AI Development Act aimed at tripling Europe’s data center capacity within five to seven years, which is crucial given AI systems’ escalating computational demands.
Beyond hardware limitations, Europe faces significant challenges in data access. The strict privacy protections contained in the GDPR legislation, have had the inconvenient side effect of reducing the availability of training data, which is essential for sophisticated AI models. The Commission plans to address this through AI data labs that will aggregate datasets while maintaining compliance with privacy regulations.
The EU’s AI Act, passed last year as the world’s first comprehensive AI legislation, creates another thin line to thread. While establishing ethical guidelines by banning certain high-risk applications and imposing transparency requirements, these regulations could potentially hamper innovation, particularly for resource-constrained startups.
Recognizing this concern, the Commission plans to launch an AI Act Service Desk in 2025, offering guidance to businesses navigating the regulatory landscape.
Another challenge, is how to make sure that boosting the EU’s AI capacity does not hinder the bloc’s ambitious green transition goals. Data centers’ energy and water consumption is quickly increasing and cause for concern for their impact on the environment.
According to the Commission, “green computing will continue to be pursued through energy-efficient supercomputers optimized for AI, using techniques such as dynamic power saving and re-use techniques like advanced cooling and recycling of the heat produced”. The goal is to make data centers climate neutral by 2030.
The AI Continent Action Plan represents Europe’s most coordinated effort to secure relevance in the AI landscape. “The global race for AI is far from over,” said Henna Virkkunen, EU Executive Vice-President for Tech Sovereignty, Security and Democracy. “This action plan outlines key areas where efforts need to intensify to make Europe a leading AI continent.”
Significant obstacles remain: insufficient private investment, market fragmentation across 27 member states, and regulatory complexity could undermine Europe’s ambitions. Success will depend on translating vision into rapid, coordinated execution across governments, businesses, and research institutions throughout the bloc.
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