UPDATE — SEPTEMBER 2025: The EU’s AI Factory initiative, first announced in late 2024 under the EuroHPC Joint Undertaking, has now advanced into implementation, with several sites beginning operations and others moving through negotiations.
After the December 2024 review, a number of the seven original proposals were cleared for the next stage, with Finland, Germany, and Italy among the first to launch pilot AI Factories in summer 2025. These hubs are already focusing on priority sectors such as healthcare and manufacturing, using EuroHPC’s upgraded supercomputers to develop and test generative AI models aligned with EU standards.
A second call for proposals, which closed on February 1, 2025, 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 in June 2025, 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), 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.
The proposals come from Finland, Luxembourg, Sweden, Germany, Italy, Greece, and Spain, the latter involving partners from Portugal, Romania, and Turkey. The aim is to create a European AI ecosystem with interconnected AI Factories designed to enhance computing power, data access, and talent in the field. This initiative, expected to launch in early 2025, aligns with Commission President Ursula von der Leyen’s strategic goals of advancing digital resilience and leadership within the EU.
These AI Factories will function as innovation hubs, utilizing the substantial computing capacity of EuroHPC’s supercomputers to build generative AI models that prioritize trustworthiness and comply with EU values, including privacy and data protection. EuroHPC has already committed over €2.1 billion to expand AI capabilities in its supercomputers, including developing AI-focused microprocessors and providing skills training. Additionally, the Commission plans to support startup growth in the AI sector with €100 million in funding through InvestEU, anticipated to drive an extra €1 billion in private investment.
The selected AI Factories will facilitate collaboration between countries, providing European startups and SMEs with access to AI-optimized HPC resources. This infrastructure will allow small businesses to develop and test cutting-edge AI applications in fields such as healthcare, energy, manufacturing, and environmental science.
Each proposal for the AI Factories will be reviewed by an independent panel, with the first selections expected in December 2024. Cyprus and Slovenia have also shown interest in joining future AI Factory initiatives, and a second application deadline has been set for February 1, 2025.
This initiative complements the EU’s AI Testing and Experimentation Facilities (TEFs), specialized testing sites that offer a controlled environment for pre-market AI validation. The partnership between AI Factories and TEFs is intended to streamline AI model testing, ensuring that AI innovations meet EU standards before market launch.
The recent establishment of the European AI Office will oversee the coordination of these efforts with the EuroHPC JU and other stakeholders, fostering investment and supporting the advancement of AI applications across Europe. As the EU rolls out this initiative, the AI Factories are set to play a central role in achieving the EU’s goal of an ecosystem rooted in AI excellence and trust, aiming to position Europe at the forefront of global AI development.
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