Report: EU's 20 Billion Euro AI Data Center Plan Thwarted by Delays and Funding Issues

Delayed frequently and funding shortages are eroding confidence among stakeholders. The EU’s ambitious plan to invest €20 billion in building five super-scale AI data centers is facing severe challenges, falling behind once again in the AI infrastructure race. According to reports, the project’s bidding process has been repeatedly postponed, and there is no definitive timeline for when subsidies will be disbursed. The enthusiasm of some potential partners has noticeably cooled. The bidding process was originally slated to begin in May this year, but is now expected to be delayed until July. According to Poland’s Minister of Digital Affairs Dariusz Standerski, who participated in EU negotiations, project funds will be distributed in two phases, to be implemented in 2028 and 2030, respectively. Meanwhile, funding gaps are restricting progress; before the new budget cycle begins in 2028, at most only two of the five planned data centers can obtain support. This situation is causing concern among EU officials: if there isn’t substantial investment in domestic data centers, Europe will once again miss out on a technology revolution led by Silicon Valley. At the same time, SoftBank Group has recently announced plans to invest up to €75 billion in building data centers in France—a scale far surpassing the EU’s collective plan, with external competitive pressure intensifying. ## Frequent delays damage credibility The European Commission has so far postponed the release of data center subsidy standards several times, rendering the entire project uncertain. Maria Nowicka, a policy researcher at the Brussels think tank Interface, said that the “super-factory” plan has sparked much political discussion, but actual progress has been poor. “I can’t count how many times it’s been postponed,” she said. “There’s almost no clear direction at this point.” An EU Commission spokesperson stated that relevant proposals will be approved as soon as adequate preparations are made. German business newspaper Handelsblatt had previously reported on widespread disappointment among project stakeholders. Originally, about 70 companies expressed interest in bidding, but now it’s expected that only around 10 groups will participate, with each country submitting at most one proposal. ## Funding structure gaps and risk of scaling down In terms of financing, the EU plans to provide €4.1 billion in subsidies, with host countries matching this amount. The remaining funds will be provided by investors, and it is expected that government funding will make up less than half of the total amount. However, insiders pointed out that the final approved data center scale could be greatly reduced, which would significantly undermine the appeal of cost-sharing partnerships. At least two consortia said they may reconsider submitting bidding proposals if project size is notably downsized. The EU initially planned for each data center to have a capacity of 1 gigawatt, equipped with about 100,000 high-end chips, aiming to compete with American hyperscale cloud service projects. Now, this goal appears at high risk of not being achieved. ## Enterprise enthusiasm wanes, participation becomes cautious Several companies that were initially interested in leading the project have lowered their expectations. In Germany, supermarket giant Lidl's parent Schwarz Group and Deutsche Telekom both expressed interest in heading consortia. However, the complex and lengthy bidding process, combined with constantly shifting rules, has clearly decreased Schwarz Group’s enthusiasm; the group is now proceeding with its own data center construction project south of Berlin. Deutsche Telekom CEO Tim Hoettges stated at an industry conference this week that the company would only consider participating in the super-factory project if industrial and government clients provide guaranteed demand. The company also announced plans to double the number of Nvidia processors at its Munich facility to 20,000 GPUs. Spanish telecom Telefónica’s stance is more subdued. On May 27 at an industry event, COO Emilio Gayo said Telefónica “does not need to play a major investor role”, and is considering holding a 10% to 15% stake in a bidding joint venture. ## European AI companies call for breaking national boundaries, EU tech strategy questioned Europe’s most valuable AI startup, Mistral AI, is in talks to join a €10 billion data center consortium in France, which will bid for EU subsidies. But Mistral CEO Arthur Mensch has criticized the overall plan design. “One issue is that this plan is entirely conceived at the national level, which makes no sense,” Mensch said in an interview last month. “Any effort to succeed in this field must be pan-European and on a much larger scale than the current plan’s framework.” Setbacks to this super-factory plan have renewed questions about the EU’s ability to execute its technology policies. The 2022 “Chip Act” failed to achieve the goal of doubling the EU’s share of global chip production, and Brussels is now back almost to square one in semiconductors. Meanwhile, American companies are laying out AI infrastructure globally at a faster pace. OpenAI, Anthropic, and Google parent Alphabet are pouring hundreds of billions into data centers, including accelerating expansion in Europe. Domestically in Europe, some private AI infrastructure projects are gaining momentum, highlighting the relative sluggishness of EU-led plans. *Risk warning and disclaimer* The market contains risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account individual users’ particular investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investing accordingly is at your own risk.