Selection process for AI gigafactories: Who will win the race in the EU?

The EU Commission is talking to high-ranking representatives of the member states in order to reduce the large number of applications for the construction of large European AI data centers. One possible option would be to bundle national applications, reports Euractiv. However, in Germany, an attempt by companies in the industry to agree on a joint proposal failed. Some companies have therefore submitted their own applications, which are now under consideration.

Henna Virkkunen, Vice-President of the European Commission for Technical Sovereignty, reported in June that 76 proposals for AI gigafactories from 16 countries had been received. The interested parties wanted to launch up to 60 AI gigafactories in Europe and invest over €230 billion to do so.

The rush far exceeded the Commission's expectations. Brussels had originally expected only "about six or seven proposals." Ultimately, the goal remains only four to five gigafactories. Therefore, most projects must now either be merged or canceled.

Poland wants to pool interests

Until now, the lack of coordination between applications has been a problem, alongside strong individual ambitions: some EU governments were not even aware of the applications from their own countries. However, some members are now showing a willingness to cooperate. Poland, for example, plans to build a gigafactory together with the Baltic states. The Polish Ministry of Digital Affairs confirmed to Euractiv that "discussions are underway on the possibility of combining consortia."

The big question in Brussels and the capitals involved remains: Which countries have the best chance of hosting one of the coveted gigafactories? Commission President Ursula von der Leyen (CDU) recently hinted that existing AI factories set up as part of an earlier EU initiative could be expanded as part of the project. Confusion arose when the 66-year-old spoke of unsigned contracts during the week. There is no longer any mention of this.

The approach put forward by the Commission President could favor interested parties such as the operator of the Finnish supercomputer Lumi, which already runs an AI factory. The Finnish government has applied to expand the facility with a consortium led by Nokia. For Virkkunen, such a commitment would also be a home game, so to speak: the Tech Commissioner herself comes from Finland.

Negotiations underway in Germany

In Germany, there were originally efforts to submit a joint application. However, an initiative by German tech companies such as SAP, Deutsche Telekom, Siemens, Ionos, and the Schwarz Group failed because the participants could not agree on a concept. Ultimately, several consortia submitted competing applications in response to the call.

Deutsche Telekom rushed ahead with the announcement that, together with Nvidia, an AI data center with a capacity of at least 10,000 GPUs (graphics processing units) would be built within the next nine months. However, it explained that this commitment should be seen in parallel with an application for the EU initiative.

Ionos submitted an expression of interest for an AI Gigafactory together with Hochtief. The latest technology with an initial capacity of over 50,000 GPUs, scalable to over 100,000 GPUs, is to be used. The Schwarz Group, known for its subsidiaries Lidl and Kaufland, has submitted an independent application through its IT subsidiary Schwarz Digits. Bavaria also wants to become the location of an AI gigafactory with "Blue Swan." Silicon Saxony has also entered the fray as an "active supporter of a strong and powerful German consortium."

Bastian Koller, managing director of the High Performance Computing Center Stuttgart (HLRS), saw a willingness to talk among many players in Germany before the summer: He assumes "that consortia will still form in the course of the process," he told the Tagesspiegel newspaper. The HLRS is involved in the proposal from the Schwarz Group and the HammerHAI AI factory initiative.

Telekom also expected that the exchange between the various players would intensify once again. So far, the major corporations that have entered the race have each claimed leadership for themselves.

While the German applicants are now reorganizing themselves, one top dog is holding back: SAP does not want to get involved for the time being. Thomas Saueressig, a member of the software giant's executive board, emphasized in view of the economic challenges involved in realizing a mega AI factory: "It can only be done in partnership."

(nen)