Europe’s trillion-euro AI gamble: Inside the EU’s bold plan to lead the global artificial intelligence race

The European Commission has officially unveiled its AI Continent Action Plan, an ambitious framework designed to position the European Union as a global leader in artificial intelligence. The announcement was made following a commitment by European Commission President Ursula von der Leyen at the AI Action Summit held in Paris in February 2025. This strategic roadmap, which aligns with Europe’s vision for digital sovereignty, is rooted in the belief that Europe can transform its world-class talent, research heritage, and advanced industrial base into scalable, sovereign AI innovation.

The plan responds to increasing global competition in AI, particularly from the United States and China, which have rapidly built dominance through foundation models and generative AI tools. Europe’s challenge has been to develop a coordinated response that does not merely rely on regulation but also actively fosters innovation, adoption, and infrastructure investment. The AI Continent Action Plan is a recognition of this need—a structured approach to bolster Europe’s position through five major pillars: infrastructure, data access, sectoral adoption, talent development, and regulatory support.

How will AI Factories and Gigafactories reshape AI infrastructure across Europe?

Central to the initiative is the creation and scaling of AI Factories and AI Gigafactories, which are being positioned as the bedrock of the EU’s AI infrastructure. These facilities will integrate advanced computing capabilities, including access to world-class supercomputers and tens of thousands of cutting-edge AI chips.

The AI Factories, of which thirteen are already under development, are closely linked with Europe’s existing supercomputing network. These facilities aim to support startups, research institutions, and industries in developing next-generation AI models and applications. The role of these Factories goes beyond processing power; they are also expected to become hubs of collaboration where curated datasets, cloud resources, and domain expertise converge to accelerate AI deployment.

The AI Gigafactories, however, represent the next leap. Envisioned as large-scale installations equipped with roughly 100,000 high-performance AI chips, they will quadruple the current computing capacity offered by existing Factories. These Gigafactories are intended to enable the training of complex frontier AI models at an unprecedented scale, helping Europe reduce reliance on external technological suppliers and secure strategic autonomy in critical sectors such as health, energy, mobility, and defense.

To finance this scale-up, the Commission has launched InvestAI, a €20 billion private investment stimulus package aimed at supporting up to five Gigafactories. This move builds on earlier funding efforts, including the EuroHPC Joint Undertaking (JU) regulation amendments in 2024 that allowed for the legal framework to create AI Factories under European coordination.

Why is access to high-quality data so essential for European AI leadership?

While infrastructure offers computational power, data remains the critical ingredient for training effective AI models. Recognising this, the European Commission plans to roll out Data Labs within AI Factories to aggregate and curate large volumes of high-quality data from diverse sources, including public institutions, academia, and industry.

The launch of a Data Union Strategy in 2025 will serve as a broader umbrella policy for building an internal market for data, enabling frictionless exchange across sectors and borders. This approach mirrors ongoing discussions in Europe around the Data Act and the Digital Services Act, both of which aim to enable fair, open, and competitive digital markets.

Through these data initiatives, the European Commission seeks to eliminate one of the major bottlenecks in AI development—limited access to rich, sector-specific datasets. Enabling a “data commons” approach may offer smaller players, especially startups and SMEs, the ability to compete with major cloud and tech firms that traditionally dominate data access and monetisation.

How will the Apply AI Strategy encourage real-world AI adoption in Europe?

Despite the continent’s robust research and talent, AI adoption among European businesses remains low, with only 13.5% of EU companies reportedly using AI technologies. To close this gap, the European Commission will introduce an Apply AI Strategy aimed at incentivising sector-specific deployment and developing tailored solutions for critical public and private domains.

This strategy will rely on an interconnected network of AI Factories and European Digital Innovation Hubs (EDIHs) to provide practical tools, mentorship, and co-development opportunities to SMEs and large enterprises alike. The goal is to build a scalable ecosystem where businesses are supported not only in AI experimentation but also in large-scale adoption.

The Commission has also launched public consultations to solicit views on this strategy, alongside another consultation focused on the proposed Cloud and AI Development Act, which aims to stimulate the growth of sustainable data centres and triple Europe’s cloud computing capacity within five to seven years. These efforts collectively address the technological, operational, and financial barriers that currently limit AI deployment across Europe.

How is the EU addressing the talent gap in AI and machine learning?

To lead in artificial intelligence, Europe must also address its AI talent deficit. The Action Plan proposes a multi-pronged approach to develop, attract, and retain highly skilled workers in AI, generative AI, and related fields. This includes the creation of a Talent Pool to streamline the recruitment of international experts and an upcoming AI Skills Academy offering fellowship programmes, including Marie Skłodowska-Curie Action ‘Choose Europe’ schemes.

These initiatives will be paired with legal pathways for skilled migration from non-EU countries and focused educational reforms to embed AI training in sectors such as manufacturing, healthcare, and public administration. By focusing on upskilling and reskilling, the European Commission intends to prepare both the existing workforce and the next generation for an AI-driven economy.

The plan also aligns with broader goals of technological sovereignty by encouraging top European AI researchers working abroad to return, and by building AI expertise within EU member states’ academic institutions and private sector R&D units.

How does the AI Act support Europe’s regulatory leadership in AI?

Regulation remains a defining feature of Europe’s digital strategy. The AI Act, which came into force on 1 August 2024, provides a rules-based framework that balances innovation with safety and trust. The Act introduces clear categories of risk, regulates high-risk applications, and bans certain AI practices deemed harmful to fundamental rights.

To support implementation, the Commission is launching an AI Act Service Desk—a central portal offering information, compliance guidance, and industry-specific help to businesses navigating the new regulatory landscape. This service desk is designed to demystify the regulatory process for startups and SMEs, ensuring they are not left behind due to compliance burdens.

Stakeholder consultations are now being used to refine how the AI Act interacts with the wider AI Continent Action Plan. The upcoming consultation on the Data Union Strategy in May, along with dialogues involving industry and public sector leaders, are expected to shape this evolving policy space further.

The AI Continent Action Plan is the most comprehensive initiative ever launched by the European Union in the field of artificial intelligence. It offers a framework that combines strategic investment, infrastructure scaling, data access, regulatory clarity, and talent development. While the road ahead includes major challenges, from market fragmentation to transatlantic competition, the EU is now laying the institutional groundwork to claim a leading role in the global AI economy. Through this initiative, Europe is not only aiming to compete—it is aiming to lead.