EU to invest €50B to ‘supercharge’ innovation in artificial intelligence

The European Union plans to invest €50 billion to support the development and application of artificial intelligence, Commission President Ursula von der Leyen announced on Tuesday, saying European AI innovation needs to be “supercharged”.

This InvestAI initiative will supplement a €150 billion investment pledge from the private sector as part of the EU AI Champions Initiative launched on Monday at the AI Action Summit in Paris. This means Europe hopes to mobilise a total of €200 billion over the next five years.

“We will have a focus on industrial and mission-critical applications. It will be the largest public-private partnership in the world for the development of trustworthy AI,” von der Leyen said.

The planned EU investment includes a new €20 billion fund for four AI gigafactories, which will specialise in training very large AI models. Each facility will have around 100,000 cutting-edge AI chips, around four times more than the AI factories currently being set up.

The Commission’s present AI factories initiative involves upgrading EU supercomputers and building new machines suited to the development of AI models and applications. The first seven AI factories were announced in December, and the Commission will soon announce an additional five.

The EU and its member states have already committed to investing €10 billion in the AI factories. Von der Leyen said this was “the largest public investment in AI in the world” and should unlock ten times more in private investment.

The idea is to give researchers and companies, including start-ups and SMEs, access to EU supercomputers to develop and train their models. “We want AI developers to compete based on how innovative they are, not just on their access to chips or the size of their financial firepower,” von der Leyen said.

The Commission had previously committed to setting up a European AI Research Council, modelled on the CERN nuclear research centre in Geneva, to pool resources. Von der Leyen now describes InvestAI and the AI gigafactories as a public-private partnership that will deliver the CERN vision.

“[CERN] allows the best and the brightest minds in the world to work together. And we want the same to happen in our AI gigafactories,” she said. “Researchers, entrepreneurs and investors will be able to join forces. Talents of the world are welcome. Industries will be able to collaborate and federate their data.”

Not just science

In contrast to recommendations from the Commission’s scientific advisors, the focus will not only be on AI in science.

“InvestAI will include a layered fund, with shares of different risk and return profiles. The EU budget would derisk the investment of other partners,” the Commission clarified in a statement. Initial EU funding will come from existing programmes such as the Digital Europe Programme, Horizon Europe and InvestEU, while member states can also contribute using Cohesion funds.

“Funding of AI gigafactories with a mix of grants and equity will serve as one of the pilot cases for strategic technologies announced in the Competitiveness Compass,” the statement says, referring to plans to pilot the coordination of EU and member state policies in selected areas under a Competitiveness Coordination Tool.

The private investors behind the AI Champions Initiative say their funds will support AI technology companies, as well as businesses applying AI, and critical infrastructure such as energy and data centres.

A spokesperson for industry association DigitalEurope welcomed the commitment to boost AI investment, but said a stronger public contribution from the EU’s next long-term budget from 2028 would be crucial. “With €150 billion expected from private sources and only €50 billion from public funds, none of it fresh, Europe needs to be more ambitious,” the spokesperson said.

Others are more optimistic. “This is indeed the order of magnitude that we think could really secure Europe a seat at the table of global AI development,” said Bálint Pataki, a senior  researcher at the Centre for Future Generations (CFG), and co-author of a recent CERN for AI blueprint released by the think tank.

He compares it to a recent pledge by the Bank of China to allocate at least 1 trillion yuan, approximately €130 billion, to AI development over the next five years. In its analysis, the ICFG suggests a CERN for AI should have €30-35 billion in funding over the first three years.

While schemes such as the Digital Europe Programme will see funding diverted to the project, Pataki argues they could ultimately benefit from the AI push. “There are huge trade-offs to make, and even sacrifices to make, but this might just be Europe’s only chance to muster the investment that we need quickly enough for the trustworthy AI of tomorrow.”

For Pataki, the AI gigafactories are the right vehicle to deliver a CERN for AI. “We have to research multiple promising research directions to ultimately invent trustworthy AI,” he said, “so having large compute capacities in these gigafactories could be really vital for that.”

Global race

Europe had been under pressure to respond after the US announced the Stargate initiative mobilising $500bn worth of investment, and Chinese company DeepSeek disrupted the market with the launch of its R1 model, a seemingly more cost and energy-efficient rival to established US players.

“The AI race is far from being over,” von der Leyen said. “The frontier is constantly moving. Global leadership is still up for grabs.”

The focus will be on fostering AI adoption in key economic sectors, while harnessing Europe’s strengths, notably its “science and technology mastery,” she said.

“European AI focuses on AI adoption in complex applications, using our unique industrial and manufacturing data and know-how,” she went on. It is also “cooperative,” bringing together talent from different countries and sectors, and embraces open-source innovation, she said.

Pataki suggests trustworthy AI in particular is a niche where Europe can still secure global leadership, as other markets are not prioritising safety. “Realistically, Europe will not manage, and nor should we try, to remake ChatGPT. The Americans and the Chinese will be three steps ahead of us frankly if we set our aims to the AI of yesterday rather than the AI of tomorrow,” he said.

During the summit the EU was criticised for its focus on regulating AI rather than stimulating investment. Von der Leyen defended the AI Act, saying it offers one set of safety rules rather than 27 national regulations, but she also reiterated her commitment to cutting red tape.

Clark Parsons, chief executive of the European Startup Network, praised the EU’s “newfound urgency” on AI, but warned rules such as the AI Act and the General Data Protection Regulation make it difficult for investors to choose Europe.

“Now that US Vice President Vance came to Paris to tout his American First vision for competing in the AI race, Europe’s response still feels half-baked,” Parsons said.

Ahead of the summit, French President Emmanuel Macron announced that €109 billion will be invested in the French AI sector in the coming years. “It’s the exact equivalent for France of what the US announced with Stargate,” Macron said. 

Macron used the summit to pitch France to global AI developers, promising them abundant electricity. Referencing Donald Trump’s call for oil companies to “drill, baby, drill!”, Macron said that in France, it’s “plug, baby, plug!”