Henna Virkkunen reveals: The EU’s giant investment in gigafactories will start soon – Here’s the reason

Executive Vice-President of the European Commission, Commissioner for Technological Self-Reliance, Security and Democracy Henna Virkkunen sitting in his office on the top floor of the Commission’s Berlaymont building.

Virkkunen’s responsibility is to ensure that Europe does not fall behind in artificial intelligence development, but there are plenty of problems. Europe suffers from a lack of computing capacity. For example, the United States already has twice the data center capacity compared to the EU. In addition, three US companies already control 65 percent of the EU cloud service market.

According to Virkkunen, dependence on external actors weakens the operational possibilities of European companies and threatens Europe’s digital sovereignty.

In a few weeks there will be a race that should decide a lot. It launches one of the largest investment projects in the history of the EU. The soon-to-be-opened competition will decide in which countries Europe’s first artificial intelligence gigafactories will be built. They are massive artificial intelligence computing centers with which Europe is trying to catch up with the lead of the US and Asia.

The future gigafactories will have around 100,000 high-end AI processors. They can be used to train and run the largest so-called frontier models, which require many times the power compared to traditional data centers.

According to Virkkunen, gigafactories are needed because without them Europe cannot develop its own top-level artificial intelligence models.

“Calculating capacity is currently a big bottleneck for the development of artificial intelligence.”

Virkkunen says that there are approximately 8,000 startups developing artificial intelligence in Europe, but they do not have sufficient access to computing. Model training is on waiting lists, and some companies have to take their development work outside the EU, usually to the United States.

Huge infrastructure projects

When the Commission opened the pre-application window for gigafactories last year, there was a huge number of responses: 76 preliminary applications from 16 member countries. At the same time, it is known that a maximum of only five final gigafactories can be established.

“It brought us a really positive challenge,” says Virkkunen.

He says that the applicants initially did not know about each other’s plans, so the Commission has since encouraged member countries to form larger consortia.

According to Virkkunen, the finalization of the gigafactory search process is currently underway.

“It will probably take a few more weeks before it is opened,” he estimated.

The scale of the project is exceptional.

“These (gigafactories) are the biggest infrastructure projects in Europe that we have ever done.”

The estimated cost of each gigafactory is at least 2–3 billion euros. 70 percent of the funding would come from private investors and 30 percent from the EU and member states.

“It is not realistic that dozens of such gigafactories would be invested in Europe,” says Virkkunen.

19 artificial intelligence factories, i.e. smaller publicly funded centers, are currently under development. Finland’s Lumi supercomputer will also get its own artificial intelligence extension, but even this capacity is not enough.

“We already have six times the demand compared to what can be offered, and even if all 19 new artificial intelligence factories are completed, we will only reach a fifth of what the companies would need,” says Virkkunen.

Gigafactories would bring 4-5 times more computing power than standard artificial intelligence factories. They are intended to form Europe’s own basis for artificial intelligence computing, which would be equivalent to the hyperscale data centers of the United States and Asia.

The Nordic Consortium

Finland applies Nokian by running its own gigafactory with a business consortium. The consortium will include the Baltic countries and possibly other Nordic countries.

In an interview with Kauppalehti, the digital minister of Estonia, which is part of the Finnish gigafactory consortium, strongly believed in the success potential of the Nokia-led project.

“Together with Finland, we are clearly at the forefront of Europe, because we have a very secure and interoperable information infrastructure”, Estonia’s Minister of Digital and Justice Liisa-Ly from Pako quoth.

As vice-chairman of the commission, Virkkunen cannot promise Finland special treatment, but does not rule out Finland’s chances of success in the gigafactory race.

“What is important is the need for use and the readiness of investors. It is always a good thing if several member countries come together and see what benefits can be brought.”

“We have to go according to the criteria, which are currently being finalized, and after that the best projects will be selected,” says Virkkunen.

The future of Europe is at stake

Gigatehda projects are about the future of Europe, and how to do well in tough international competition.

“This is a key question for Europe’s survival,” Virkkunen admits.

Without computing capacity, Europe loses innovation when investments run away and startups have to take their ideas to other countries. Therefore, alongside the gigafactory project, the Commission is also preparing a technological sovereignty package, in which it is estimated that Europe will have to triple its data center capacity in the coming years. At the same time, energy consumption should also be kept under control.

Virkkunen says that the preparation of the gigafactories is done together with the European Investment Bank, because the commission has no experience in evaluating such massive projects.

“These have to be done very carefully, but at the same time I hope that the application will be opened soon. The competition is fierce, and solving the capacity is part of our technological competitiveness,” says the vice-chairman of the commission.