EU Invests €200 Billion Towards Becoming a Global Leader in AI

Key Takeaways

• The European Commission recently announced a comprehensive “AI Continent Action Plan” to help the European Union become a global leader in artificial intelligence technology.
• The action plan involves investing €200 billion towards supporting development of AI in the EU, with a focus on enhancing its AI infrastructure, increasing data access, developing advanced algorithms, fostering adoption in strategic sectors, and facilitating compliance with the EU AI Act. A leaked draft of the plan suggested it would call for AI regulatory leniency to encourage innovation, but that was walked back in the final draft.

Becoming a Global Leader in More Than Regulation

While positioning itself as a global leader in artificial intelligence (AI) regulation with the EU AI Act, the EU has not historically been a global leader in innovative AI achievements. American and Chinese companies have dominated headlines and benchmark leaderboards in a constant race to have the most advanced AI models in the world. Meanwhile, while a recent McKinsey survey suggests that around 78% of organizations across the globe use AI in at least one business function, the EU itself estimates that only 13.5% of EU companies use AI. 

In a move to better position the EU as a global leader in AI, the European Commission (the Commission) unveiled the “AI Continent Action Plan” on April 9, 2025. This ambitious plan will involve investing €200 billion towards increasing the EU’s AI capabilities, aiming to transform Europe's robust talent pool and prowess in traditional industries into engines that will accelerate AI innovation in the EU. 

A Five-Part Plan

The action plan focuses on five key pillars:

• Building a large-scale AI data and computing infrastructure. The Commission plans to bolster Europe's AI and supercomputing infrastructure through setting up at least 13 “AI Factories” across Europe that will leverage the EU’s existing supercomputing network. Additionally, the EU will establish “AI Gigafactories,” equipped with approximately 100,000 state-of-the-art AI chips, to train and develop complex AI models. These facilities will require significant public and private investments, with the “InvestAI initiative” mobilizing €20 billion for five such Gigafactories. The Commission will also propose a “Cloud and AI Development Act” to stimulate private sector investment in cloud capacity and data centers. The proposed legislation will aim to triple the EU’s data center capacity in the next five to seven years by addressing obstacles to finding suitable locations for data centers and obtaining access to sufficient energy resources. The Commission notes that, currently, the process of obtaining all the necessary permits and environmental authorizations to build a data center in the EU often takes longer than four years.
• Increasing access to data. Access to large volumes of high-quality data is crucial for AI innovation. The action plan includes the creation of dedicated data labs within the AI Factories to curate large data volumes from various sources and ensure AI developers in the EU have access to high-quality data. The Commission intends to launch a comprehensive “Data Union Strategy” in 2025 to enhance data interoperability and availability across sectors. Additionally, the Data Union Strategy will involve investigating ways to simplify compliance obligations with EU data regulations so that companies can more easily share data for AI use.
• Fostering AI adoption in strategic sectors. As noted above, despite the technology’s potential, the EU estimates that only 13.5% of EU companies have adopted AI. To address the lack of adoption, the Commission will launch an “Apply AI Strategy” to develop tailored AI solutions and boost their adoption in strategic public and private sectors. The Apply AI Strategy will focus on leveraging “made in Europe” AI solutions to increase the productivity and competitiveness of key EU industry sectors while also improving the quality and efficiency of public services. The action plan calls for leveraging the existing European digital innovation hubs across the EU, transforming them into “Experience Centres for AI” with a renewed focus on these goals. The European digital innovation hubs will work with the AI Factories to help companies get access to computing and data resources and to support other AI initiatives, such as regulatory sandboxes.
• Strengthening AI skills and talents. To meet the rising demand for AI talent, the Commission will facilitate the international recruitment of highly skilled AI experts through a variety of initiatives. Additionally, the action plan emphasizes educational and training programs for AI to prepare the next generation of AI specialists, from supporting development of AI literacy in primary and secondary education to upskilling and reskilling the existing EU workforce in the use of AI.
• Fostering compliance with the EU AI Act. The Commission emphasizes that the EU adopted the AI Act “to create the conditions for a well-functioning single market for AI,” and its success will depend on how “workable its rules are in practice.” The Commission will launch an “AI Act Service Desk” to help stakeholders understand the AI Act, including by answering questions and providing free resources and advice on how to comply with the AI Act. Additionally, the Commission will leverage public consultations to help identify further measures to “facilitate compliance and possible simplification” of the AI Act. It was in this area where the final draft differed the most from the earlier leaked draft of the plan. An earlier draft spoke of “simplifying” compliance. This late change to the plan suggests there remains some tension within the European Commission on the AI Act’s implementation and compliance obligations.

Next Steps

The Commission has opened two public consultations from April 9 to June 4, 2025, to gather stakeholder views on the proposed Cloud and AI Development Act and Apply AI Strategy, with a third public consultation on the Data Union Strategy planned for May. Additionally, the Commission has indicated that it plans to organize dialogues with industry representatives and the public sector to help shape the Apply AI Strategy and to identify untapped potential in adopting AI technologies and opportunities for scaling up within various sectors.