EU to mobilise €200 Billion in new AI fund to chase China and the US dominance

The EU is way behind China and the US in many emerging technology areas, with a report drafted by ex Commissioner Draghi saying that Europe “needed to invest up to $800 Billion a year to catch up or risk being irrelevant.” And today European Commission President Ursula von der Leyen has announced that the EU will top up a continental Artificial Intelligence (AI) push to hit €200 billion ($207 billion). The funding comes as Europe looks over its shoulder nervously at the US's $500 Billion Stargate Project and new Chinese AI contender DeepSeek.

The €150 billion ($155 billion) in the European AI Champions initiative pot so far was placed there by backers led by venture capitalist General Catalyst, and includes Dutch photolithography giant ASML, France's Airbus, Germany's Siemens, Infineon, Philips, Volkswagen and more. The EU budget will, among other things, serve to "derisk" the investment of the private firms. The new funding was announced at the AI Action Summit in Paris, France.

The Future of Artificial Intelligence, AI Keynote Speaker Matthew Griffin

The EU's €200 billion is smaller than the amount of funding announced for America's Stargate project, which aims to build advanced AI infrastructure with an eventual $500 billion price tag. OpenAI's Stargate was billed by US President Donald Trump as "the largest AI infrastructure project by far in history," though following this his right hand man and would-be OpenAI owner Elon Musk claimed "They don't actually have the money." The project is backed by SoftBank, OpenAI, Oracle, and MGX.

Von der Leyen said the EU's InvestAI fund would finance four future AI Gigafactories across the region, specialized in training "the most complex, very large, AI models." She said the bloc wants AI "to be a force for good and for growth. We are doing this through our own European approach – based on openness, cooperation and excellent talent." The Commission had already announced an initial seven AI factories in December and said it would "soon announce the next five."

The Commission said the bloc's "approach still needs to be supercharged," claiming the move would "mobilize unprecedented capital..." in a "unique" public-private partnership she characterized as a "CERN for AI."

Von der Leyen, a second term commission president and famously a backer of Europe's data privacy game changer the General Data Protection Regulation (GPDR), as well as Big Tech antitrust law the Digital Services Act, was also keen to let the world know the EU would be reducing bureaucratic red tape. Like it or not, AI technology is perceived as business-critical, and this is not lost on the politicos.

The Commission yesterday decided to withdraw its long-stalled ePrivacy Regulation and the Artificial Intelligence Liability Directive (AILD), long feared by the tech sector as it would have made it much easier for people to sue companies over damages caused by AI tech.

Senior Vice President and Head of CCIA Europe, Daniel Friedlaender said the commission's "willingness to review past work" was laudable. "Withdrawing legislation on a regular basis should become normal in a well functioning EU," Friedlaender added.

The world's richest economic and political bloc does have the first-to-legislate EU AI Act under its belt. Enforcement of its provisions only begins in 2026.

The EU also signalled its commitment to AI that works in the public interest with a general declaration at the summit that it wanted things like a "diverse AI ecosystem", an energy sector that's not depleted by the technology, and a careful consideration of its impact on the job market. Signatories said they wanted an AI that was "open, inclusive, transparent, ethical, safe, secure and trustworthy."

Others who signed included China, Australia, Japan, Canada, Korea, and the African Union.

The UK and US refused to sign it, with the British government saying its refusal was because it was too worried about "national security" and "global governance" while US Vice President JD Vance told Paris delegates that too much AI regulation could "kill a transformative industry just as it's taking off."

He also told attendees at the Grand Palais that the US was "troubled by reports that some foreign governments are considering tightening screws on US tech companies," likely referring to Europe's Digital Services Act.