EIB Group and European Commission back AI gigafactories: what finance leaders need to know
(Credit: Unsplash) - This article is published in association with European Investment Bank.
Europe is moving to scale advanced compute at home. The EIB Group and the European Commission signed a Memorandum of Understanding to pool resources and speed up development of up to five large-scale AI gigafactories across the EU.
These sites are meant to secure compute for training very large AI models, strengthen tech independence, and keep European research and industry competitive. Expect acceleration in financing activity, project formation, and public-private partnerships.
"Europe is a technological powerhouse," said EIB Group President Nadia Calviño. "By supporting the rollout of major AI gigafactories, we scale up computing capacity and create the conditions for innovation to thrive."
What an AI gigafactory actually is
Think data and compute hubs built to train the most complex models in medicine, cleantech, and space. Each site aims for roughly 100,000 top-tier AI chips - about four times more than today's AI factory builds in Europe.
This is the next step after 19 EU-backed AI factories already in process. In February 2025, the Commission earmarked €20 billion via InvestAI to set up as many as five gigafactories.
Capital stack in view
- Grants: Commission funding through InvestAI, with projects aligned to the European High-Performance Computing Joint Undertaking (EuroHPC JU), which currently covers 19 AI factory projects.
- Debt: EIB Group will explore loans to supplement grants and crowd in private capital, with advisory support via the InvestEU Advisory Hub to improve bankability.
- Equity and partnerships: Expect consortia across cloud providers, chip suppliers, energy companies, telcos, and research institutions, often via project SPVs.
Bankability checklist for CFOs and investors
- Compute plan: Sourcing ~100k advanced AI chips per site, long lead times, vendor concentration risk, refresh cycles, and service-level commitments.
- Commercial model: Utilization assumptions, pricing (compute-as-a-service), multitenant access for startups, researchers, and industry, plus offtake agreements or MOUs that firm up demand.
- Energy and site: Grid capacity, renewable PPAs, cooling and water availability, heat reuse, and proximity to research and enterprise demand.
- Security and compliance: Data protection, sovereign cloud needs, procurement rules, and alignment with EU funding requirements.
- Delivery and operations: EPC capabilities, performance guarantees, uptime SLAs, and lifecycle OPEX tied to power, maintenance, and chip upgrades.
- Governance: IP access, fair-use for public research, transparent pricing, and clear roles across consortium partners.
- Public funding fit: Eligibility under EuroHPC/InvestAI, state-aid compliance, and a clear path through advisory and due diligence.
Why this matters for European finance
- Deal flow: New pipelines in digital infrastructure, energy, and semiconductors with blended finance opportunities.
- Regional investment: Potential siting in cohesion regions to align with EU objectives and access additional support.
- Adjacencies: Follow-on capital needs across power generation, grid upgrades, cooling, networking, and data center ecosystems.
- Public-private leverage: Grants plus EIB loans aim to de-risk private capital and accelerate closing.
What the agreement sets in motion
The EIB Group and Commission will coordinate support for gigafactory projects that can tap EU and participating-country funds under EuroHPC JU, with gigafactories set up under InvestAI. Advisory backing via the InvestEU Advisory Hub targets project structuring and bankability.
"AI will spur our research and innovation and boost our competitiveness," said European Commission Executive Vice-President for Tech Sovereignty, Security and Democracy Henna Virkkunen. "We will help mobilise unprecedented capital for European AI gigafactories that will enable all our scientists and companies to develop the most advanced, very large models needed to make Europe an AI continent."
Background
The EIB Group - including the European Investment Fund - is the EU's long-term lending arm, owned by Member States. In 2024, it signed nearly €89 billion across 900+ high-impact projects, with about half of EU lending in cohesion regions and almost 60% supporting climate and environmental goals.
Through its flagship TechEU programme, the EIB Group plans to commit €70 billion from 2025 to 2027 to support high-risk projects and innovative companies, aiming to mobilise €250 billion with partners. A TechEU Portal with an "Investment Readiness Checker" helps startups and scaleups in AI, cleantech, life sciences, and defence/space.
Next steps for finance teams
- Engage early with the InvestEU Advisory Hub to stress-test your investment case, governance, and procurement approach.
- Secure offtake intent from research institutions and enterprise buyers to underpin utilization and pricing.
- Lock in chip supply frameworks, energy strategy (including PPAs), and delivery partners with performance guarantees.
- Structure blended finance: Commission grants, EIB loans, private equity, vendor financing, and potential export credit where relevant.
- Build a transparent data room and financial model with scenarios on utilization, power costs, and refresh capex.
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