UPDATE — SEPTEMBER 2025: The EU’s AI Factory initiative, first announced in late 2024 under the EuroHPC Joint Undertaking, has now advanced into implementation. Also, several sites have begun operations with others moving through negotiations.
After the December 2024 review, a number of the seven original proposals were cleared for the next stage. Finland, Germany, and Italy are among the first to launch pilot AI Factories in summer 2025. These hubs are already focusing on priority sectors such as healthcare and manufacturing. They’re using EuroHPC’s upgraded supercomputers to develop and test generative AI models aligned with EU standards.
A second call for proposals drew interest from Cyprus and Slovenia, expanding the pool of candidate countries. EuroHPC also increased its funding envelope beyond the original €2.1 billion, tying AI Factory resources to broader exascale supercomputing deployments, including LUMI (Finland) and Leonardo (Italy), both of which are receiving AI-specific upgrades.
The European AI Office established a dedicated coordination task force, linking the Factories directly to AI Act enforcement. This ensures that the sites operate not just as research and innovation hubs. But also as compliance-aware development environments, helping SMEs and startups build models that meet EU regulatory requirements.
Integration pilots are also underway between AI Factories and AI Testing and Experimentation Facilities (TEFs). It’s creating a pipeline where developers can transition from large-scale compute to pre-market validation within the same EU framework. Meanwhile, the InvestEU fund, activated in Q2 2025, is already drawing venture capital commitments, with Commission estimates suggesting the initiative is on track to catalyze over €1 billion in private investment.
ORIGINAL NEWS POST:
EU Moves Closer to AI Leadership with New AI Factories Proposal, Boosting Innovation Across Europe
The European Commission has received seven proposals from 15 EU Member States and two associated countries to establish Europe’s first AI Factories, which are part of a broader initiative to strengthen AI innovation across the EU. These AI Factories, operating within the EuroHPC Joint Undertaking (JU), will leverage the EU’s advanced high-performance computing (HPC) network to accelerate the development of generative AI models and AI-driven solutions for industry, research, and startups across Europe.
Member States Compete to Host New AI Hubs
The Commission has received seven proposals from 15 EU Member States and two associated countries. The submissions come from Finland, Luxembourg, Sweden, Germany, Italy, Greece, and Spain. Spain’s proposal includes participation from Portugal, Romania, and Turkey. Cyprus and Slovenia have also expressed interest in joining future application rounds. These AI Factories are intended to serve as major innovation hubs. Each site would use EuroHPC’s supercomputers to build and test generative AI models grounded in EU values such as privacy, security, and trustworthiness. The Commission expects the first sites to begin operations in early 2025.
High-Performance Computing at the Center of the Plan
EuroHPC has committed more than €2.1 billion to expand AI capacity through upgraded supercomputers, AI-focused microprocessors, and advanced training programs. These investments will improve computing power and data access for companies that need large-scale infrastructure to train and validate AI systems. In addition, the Commission plans to support early-stage AI companies through €100 million in funding via InvestEU. The program is expected to draw as much as €1 billion in additional private investment for European AI startups.
Supporting Startups and SMEs Across Europe
The proposed AI Factories are designed to help small and medium-sized enterprises access resources that would normally be out of reach. Startups working in healthcare, manufacturing, energy, and environmental research will be able to use these new hubs to build and test AI models at scale. An independent evaluation panel will review the proposals, with the first selections expected in December 2024. The second application window closes on February 1, 2025.
A Pipeline From Development to Pre-Market Testing
The AI Factories will work closely with the EU’s AI Testing and Experimentation Facilities (TEFs). This partnership creates a pipeline where companies can move from large-scale compute environments to real-world testing conditions before releasing their systems to the market. The establishment of the European AI Office adds further coordination across the initiative. The Office will help align the Factories with broader EU AI Act obligations, ensuring that innovation and compliance move forward together.
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