The EU’s $34.6 billion AI factory plan aims to double compute capacity with 13 regional hubs and future gigafactories

Europe’s “AI factory” program has moved from concept to construction, with the European Commission earmarking €10 billion (≈ US$11.6 billion) for an initial network of 13 regional AI factories and a further €20 billion (≈ US$23.2 billion) to seed a second wave of far larger gigafactories.

The gigawatt-class sites are ambitious in scale: each facility is expected to cost €3–5 billion (≈ US$3.5–5.8 billion), house at least 100,000 high-end GPUs, and deliver several times the compute of today’s largest European AI clusters. UBS modelling suggests that a full build-out of 10–15 such plants would add roughly 1.5 to 2 GW of IT load—about 15 percent of Europe’s current data center capacity.

Brussels frames the project as a sovereignty play. The bloc already hosts about 30 percent more AI researchers per capita than the United States, but lacks the computing power to match their ambitions. By concentrating hardware, data, and expertise in “one-stop shops”, the Commission hopes to give start-ups and SMEs affordable access to large-scale training and inference infrastructure.

Delivering enough electricity is likely to be the limiting factor. Analysts warn that a single gigafactory could draw a full gigawatt of power—comparable to a midsize nuclear unit—and that upgrading grids and generation capacity will take far longer than erecting the data halls themselves. Private capital is another open question; officials concede that public money alone cannot close the funding gap, and think tanks such as Bruegel have questioned whether subsidies are the right tool at this scale.

Early pilot sites are already online. Telenor’s small-scale AI factory in Norway has begun testing sovereign language services for public-sector clients, while the first full-size EU facility is scheduled to open in Munich in early September. If the power and financing hurdles can be cleared, Brussels believes the resulting compute backbone will help narrow the trans-Atlantic AI gap and anchor a new generation of European models and applications.