Editorial illustration for EU AI Lacks Models and Compute; Germany Urged to Lead Coalition
EU's AI Gigafactories Face Skepticism from Tech Experts
EU AI Lacks Models and Compute; Germany Urged to Lead Coalition
Europe’s AI ambitions sit on a shaky foundation. The latest assessment of the continent’s sector points to a paradox: research output is solid, yet the pipeline of usable models remains thin, and the hardware horsepower needed to train them is scarce. Add to that a regulatory framework that, according to the report, tilts the playing field toward American providers.
Policymakers are therefore wrestling with a choice—whether to wait for a pan‑EU consensus on a new AI‑focused venture or to move ahead with a more limited partnership. German officials find themselves at the centre of that debate, pressed to decide if a bilateral effort with France might substitute for broader support. The commission’s guidance on this dilemma, and its take on how data‑privacy rules are shaping the competitive balance, set the stage for the following observation.
If no EU-wide majority can be found, the commission advises the German government to push the project forward as a "coalition of the willing" or as a joint German-French initiative. GDPR slows European AI development while US models benefit One of the report's sharpest findings concerns the GDPR. According to the commission, many experts see limited data availability as the single biggest obstacle for AI in Europe, even more so than limited compute capacity. The commission describes specific cases where legal concerns around the GDPR delayed German foundation models from research by several months, ultimately forcing publication under a research-only license that excluded commercial use.
Nine models. That's all Europe produced between 2023 and 2025, the commission notes, versus roughly 250 in the United States. Can Europe close the gap without regulatory reform?
The disparity is stark, especially when compute capacity is considered: Europe holds about 26,000 H100‑equivalent units, while the U.S. commands close to 1.4 million. Strong research output cannot hide that gap.
The Expert Commission on Research and Innovation points to the GDPR as a structural impediment, citing cases where data‑privacy rules have slowed model training and deployment. If an EU‑wide consensus cannot be reached, the commission recommends Germany lead a “coalition of the willing” or partner with France on a joint initiative. Yet it remains unclear whether such a coalition can overcome the regulatory and investment shortfalls identified.
The report stops short of prescribing funding levels, leaving the scale of future compute expansion uncertain. Policymakers now face a choice: adjust the regulatory environment, boost hardware resources, or accept a continuing lag behind U.S. competitors.
The path forward is still being charted.
Further Reading
- Germany and Europe's AI sector has strong research but few models, limited compute, and regulations that favor US competitors - The Decoder
- The European Union's AI Factories - Interface Europe
- AI power play: Can Europe catch up with the US and China? - Euronews
- What Deutsche Telekom's AI factory reveals about Europe's digital ... - RCR Wireless
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Common Questions Answered
What are AI Factories and how do they support Europe's AI ecosystem?
[digital-strategy.ec.europa.eu](https://digital-strategy.ec.europa.eu/en/faqs/ai-continent-action-plan-qa) describes AI Factories as open and dynamic ecosystems built around EuroHPC supercomputers that bring together computational power, data, and talent. They aim to create cutting-edge, trustworthy AI models and applications by fostering collaboration across European companies, SMEs, startups, universities, and industries.
How is the European Union addressing energy concerns in AI infrastructure development?
The EU is committed to a green digital transition by prioritizing energy efficiency in AI infrastructure. [digital-strategy.ec.europa.eu](https://digital-strategy.ec.europa.eu/en/faqs/ai-continent-action-plan-qa) notes that AI Factories select hosting sites based on environmental sustainability criteria, and will pursue green computing through energy-efficient supercomputers using techniques like dynamic power saving and advanced cooling.
What financial commitment has the EU made to support AI development?
[ec.europa.eu](https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1013) reports that in February 2025, President von der Leyen launched InvestAI, an initiative to mobilize €200 billion for AI investment. Specifically, this includes an InvestAI facility developed with the European Investment Bank Group aimed at mobilizing €20 billion to establish AI Gigafactories.