Analysis-If Europe builds the gigafactories, will an AI industry come?

Toby Sterling

Tue, Mar 11, 2025, 12:34 AM 4 min read

By Toby Sterling

AMSTERDAM (Reuters) - The European Commission is raising $20 cardinal to conception 4 "AI gigafactories" arsenic portion of Europe's strategy to drawback up with the U.S. and China connected artificial intelligence, but immoderate manufacture experts question whether it makes consciousness to physique them.

The program for the ample nationalist entree information centres, unveiled by European Commission President Ursula von der Leyen past month, volition look challenges ranging from obtaining chips to uncovering suitable sites and electricity.

"Even if we would physique specified a large computing mill successful Europe, and adjacent if we would bid a exemplary connected that infrastructure, erstwhile it's ready, what bash we bash with it?," said Bertin Martens, of economical deliberation vessel Bruegel.

It's a chickenhearted and ovum problem. The anticipation is that caller section firms specified arsenic France's Nvidia-backed Mistral start-up volition turn and usage them to make AI models that run successful enactment with EU AI information and information extortion rules, which are stricter than those successful the U.S. oregon China.

But successful the lack of ample European unreality services businesses similar Google and Amazon, oregon firms with millions of paying customers, similar ChatGPT shaper OpenAI, gathering hardware connected this standard is simply a risky venture.

EUROPE'S ANSWER TO STARGATE

The gigafactory program is portion of Europe's effect to the Draghi study connected competitiveness, which advised bold investments and a much progressive concern policy. Von der Leyen released details for the archetypal clip astatine the February 11 AI acme successful Paris arsenic portion of InvestAI, Europe's 200 cardinal euro ($216.92 billion) reply to the $500 cardinal U.S. Stargate plan.

She described gigafactories arsenic a "public-private concern ... (that) volition alteration each our scientists and companies – not conscionable the biggest - to make the astir precocious precise ample models needed to marque Europe an AI continent."

They are to beryllium financed via a caller 20 billion-euro fund, with wealth being drawn from existing EU programmes, and from subordinate states. The European Investment Bank volition participate.

Von der Leyen said gigafactories volition incorporate 100,000 "cutting-edge" chips each -- making them much than 4 times larger than the biggest supercomputer presently nether operation successful the EU, the Jupiter task successful Germany. U.S. chipmaker Nvidia sells the cutting-edge GPU chips needed to bid AI for astir $40,000 each -- implying a terms tag of respective cardinal euros per gigafactory.

While that's big, it inactive trails projects announced by U.S. firms. Facebook proprietor Meta is spending $10 cardinal to physique a 1.3 cardinal GPU installation successful Louisiana powered by 1.5 gigawatts of electricity.