Page 74 - SAMENA Trends - May 2025

REGULATORY & POLICY UPDATES SAMENA TRENDS

EU to Build AI Gigafactories in €20bn Push to Catch Up with US and China

The EU has revealed details of a €20bn green energy supply, an EU official said, to rethink its AI Act. The regulation, which
(£17bn) plan to create new sites equipped with plans for “recycling” water if it was aims to control the risks posed by AI, was
with vast supercomputers in Europe to used. Last year 47% of electricity generated approved by the European parliament only
develop the next generation of artificial in the EU came from renewable sources, last year and will not be fully applicable
intelligence models, while opening the door but campaigners fear that power-hungry until August 2027. The commission said it
to amending its landmark law that regulates datacentres could undermine Europe’s was launching a consultation on “possible
the technology. Publishing a strategy to climate ambitions. “Europe has made simplification” of the AI Act, as part of a
turn Europe into an “AI continent”, the some strides towards fully renewable wider drive to cut redtape amid concerns
European Commission vice-president electricity, and still has a long way to go, about Europe’s lagging economic growth.
Henna Virkkunen said the technology but this could all be undone by ballooning The European Consumer Organisation
was at the heart of making Europe more energy consumption,” said John Hyland, a (BEUC) said the commission needed
competitive, secure and technologically Greenpeace spokesperson. “Every power- to focus on the implementation and
sovereign, adding: “The global race for AI is guzzling datacentre risks being a lifeline enforcement of the AI Act. “Much of the
far from over.” The EU is attempting to catch to polluting power plants, well illustrated AI Act does not even apply yet but the
up with the US and China, which have taken in Ireland where they consume over a fifth commission is already signalling that it is
a lead in pioneering the technology that of the electricity.” EU officials envisage open to cutting some of its requirements.
increasingly powers shopping websites three to five AI gigafactories in the EU at When we know that consumers worry
and self-driving cars, generates text, and a cost of around €3-5bn each, compared about how AI could be used to harm them,
is predicted to play a transformative role in with €600m for the biggest AI factory. The the commission should instead be trying
healthcare, security, defence and advanced commission is seeking to raise €20bn, to reassure consumers,” said Frederico
manufacturing, among other sectors. The using public money to incentivise private Oliveira da Silva at BEUC. Virkkunen said
US has a commanding lead in AI, far ahead investors, via a facility provided by the the commission was “very committed”
of China. A report from Stanford University European Investment Bank. The bloc is to the risk-based approach and the main
this week said 40 “notable AI models” – also seeking to develop European-made AI principles of the AI Act, but was looking at
meaning influential – were produced by semiconductors, advanced chips that are whether there were some administrative
institutions in the US in 2024, compared vital for AI factories. But the commission burdens or reporting obligations that could
with 15 in China and three in Europe (all faced criticism for indicating an openness be cut to make life easier for businesses.
French). In a separate 2024 report, Stanford
found that no EU country made the top five
for “vibrancy” in AI, a metric that considered
private investment, patents and research.
It ranked the UK in third place behind
the US and China, with France in sixth
place and Germany eighth. The EU has
already embarked on a plan to build 13 AI
factories – sites with supercomputers and
datacentres, where researchers develop and
test AI models. The new AI “gigafactories”
would be much larger, targeting what
the commission called “moonshots”:
significant innovations in healthcare,
biotech, industry, robotics and scientific
discovery. While the best-performing AI
factories have supercomputers equipped
with up to 25,000 advanced AI processors,
a gigafactory would exceed 100,000 AI
processors, the strategy document said.
These power-hungry facilities, which can
require huge amounts of water for cooling,
should run “as much as possible” on a

74 MAY 2025