5 reasons
why European AI gigafactories won't meet expectations
The European plan for AI gigafactories looks impressive at first glance, which is why it fills newspapers and social media. Brussels talks about next-generation infrastructure, technological sovereignty, and Europe not falling behind in the AI race. We believe, however, that this plan won't deliver the expected impact — and here are five reasons why.
1.
Europe builds too little and too slowly — the US and China are pulling away
The EU envisions AI gigafactory projects with over 100,000 advanced AI processors, investments of roughly 3 to 5 billion euros per site, and public support of up to 35% of acquisition costs. The plan calls for approximately 10 gigafactories across Europe. Sounds impressive — until you compare it with what's happening elsewhere.
Meanwhile, the United States operates at an entirely different speed. Microsoft, Alphabet, Amazon, and Meta invest tens to hundreds of billions of dollars annually in AI infrastructure, and the Stargate project alone represents a $500 billion investment. China is building AI infrastructure in a coordinated manner across government, tech giants, and regional authorities.
2.
Gigafactories don't equal competitiveness
A common European mistake is assuming a simple equation: more compute power = higher competitiveness. It's not that simple. Having compute power isn't enough — you also need the data, talent, and business ecosystem to put it to work effectively.
3.
The public-private financing model may slow things down instead of speeding them up
The model designed to jumpstart the market may simultaneously hold it back. While public debate focuses on funding, in practice the EU wants to subsidize up to 17% of eligible investment costs — but the conditions and bureaucracy involved can make the process painfully slow.
4.
Europe doesn't have its own AI stack, even though it holds some key technologies
AI gigafactories are often sold as a step toward European technological sovereignty. But this is where precision matters. Europe can build greater control over location, physical access, and data processing conditions — but the core technology stack remains largely American.
Europe isn't insignificant in the semiconductor business, especially when you add Thermo Fisher Scientific, whose Brno base develops specialized electron microscopes without which advanced chips couldn't be manufactured. But strategic control over the full AI stack? That's still a long way off.
5.
The EU is trying to play both the American and Chinese game at once — and losing both
The US has a market engine, widely available private capital, and a government that knows how to create favorable conditions and protect strategic interests. China has the state as conductor, coordinated capital allocation, and the ability to make decisions in weeks rather than years. The EU has neither — and is trying to compensate with regulation and subsidies.
What Europe
and the Czech Republic should take away
If the EU truly wants to succeed, building gigafactories isn't enough. It must simultaneously speed up permitting, simplify decision-making, deepen capital markets, reduce energy disadvantages, and build an ecosystem where AI companies want to stay — not just consume subsidized compute time and move on.
- EuroHPC JU: AI Gigafactories consultation + FAQ.Consultation (PDF), FAQ
- European Commission: AI continent / AI Factories.AI Continent, AI Factories
- Council of the European Union: Council paves the way for the creation of AI gigafactories (16. 1. 2026).Link
- Microsoft: The golden opportunity for American AI (3. 1. 2025).Link
- Alphabet IR: 2024 Q4 Earnings Call (4. 2. 2025).Link
- Meta IR: Meta Reports Second Quarter 2025 Results (30. 7. 2025).Link
- Alibaba Cloud: RMB380 billion in AI and cloud infrastructure over next three years (24. 2. 2025).Link
- Reuters: ByteDance plans $20 billion capex in 2025, mostly on AI (23. 1. 2025).Link
- Stanford HAI: AI Index Report 2025.Link
- Council of the European Union: document ST 15072/25.PDF
- European Commission: A Competitiveness Compass for the EU (29. 1. 2025).Link
- EIB: Investment Report 2024/2025.Link
- MPO ČR: AI Gigafactory for Central and Eastern Europe is on the horizon (28. 11. 2025).Link
- Reuters: private-sector $500 billion investment in AI infrastructure / Stargate (21. 1. 2025).Link
- ECB: euro foreign exchange reference rates (27. 2. 2026).Link
