The European Union has unveiled a €20 billion plan to create new AI manufacturing hubs, aiming to catch up with the US and China in AI development.
The European Union has unveiled a €20 billion plan to create new sites equipped with vast supercomputers in Europe, aimed at developing the next generation of artificial intelligence models. This move is part of the EU’s strategy to turn Europe into an ‘AI continent,’ making it more competitive, secure, and technologically sovereign.
The US and China have taken a lead in pioneering the technology that powers shopping websites, self-driving cars, generates text, and is predicted to play a transformative role in healthcare, security, defense, and advanced manufacturing. A recent report from Stanford University found that 40 influential AI models were produced by institutions in the US in 2024, compared with 15 in China and three in Europe.
The EU has already embarked on a plan to build 13 AI factories – sites with supercomputers and datacentres where researchers develop and test AI models. The new AI ‘gigafactories’ would be much larger, targeting significant innovations in healthcare, biotech, industry, robotics, and scientific discovery. These power-hungry facilities can require huge amounts of water for cooling and should run as much as possible on a green energy supply.
The concept of AI gigafactories refers to massive facilities dedicated to producing artificial intelligence hardware, such as graphics processing units (GPUs) and application-specific integrated circuits (ASICs).
These factories are essential in meeting the growing demand for AI computing power.
According to a report by MarketsandMarkets, the global AI market is expected to reach $190 billion by 2025, with a significant portion attributed to hardware development.
Companies like Google, Amazon, and Microsoft are already investing heavily in building their own gigafactories to accelerate AI innovation.
Campaigners fear that power-hungry datacentres could undermine Europe’s climate ambitions, with 47% of electricity generated in the EU coming from renewable sources. However, these facilities also pose significant environmental concerns due to their high energy consumption and potential impact on polluting power plants.
The European Commission is seeking to raise €20 billion, using public money to incentivise private investors, via a facility provided by the European Investment Bank. The bloc aims to develop European-made AI semiconductors, advanced chips that are vital for AI factories. However, this plan has faced criticism from campaigners who argue that it should focus on implementing and enforcing existing regulations rather than simplifying them.
AI semiconductors are a type of microchip designed specifically for artificial intelligence and machine learning applications.
They provide high-performance computing power, low latency, and energy efficiency.
The global market for AI semiconductors is growing rapidly, driven by increasing demand from cloud computing, edge computing, and autonomous vehicles.
Key players in the industry include NVIDIA, AMD, and Intel, which have developed specialized chips such as GPUs and TPUs to accelerate AI workloads.
The commission is launching a consultation on ‘possible simplification’ of the AI Act as part of its drive to cut red tape amid concerns about Europe’s lagging economic growth. The European Consumer Organisation has called for the commission to focus on implementation and enforcement, arguing that consumers worry about how AI could be used to harm them.
The AI Act is a proposed regulation aimed at harmonizing artificial intelligence (AI) rules across the European Union.
The act focuses on ensuring trustworthy AI development, deployment, and use.
It sets out to address concerns around data protection, bias, and transparency in 'AI systems' .
The legislation also covers liability for damages caused by 'AI-powered products or services' .
The AI Act is part of a broader EU effort to regulate emerging technologies and promote their safe and responsible development.
The EU’s €20 billion push to catch up with US and China in AI development marks a significant step forward in its strategy to turn Europe into an ‘AI continent.’ However, this move also raises concerns about the environmental impact of power-hungry datacentres and the need for effective regulation to ensure that AI is developed and used responsibly.
- theguardian.com | EU to build AI gigafactories in €20bn push to catch up with US and China
