David Janků, Daan Juijn and Avinash Kothuri / Sep 2025
Image: Shutterstock
Europe’s AI infrastructure deficit poses a critical threat to the bloc’ strategic autonomy. Epoch AI research shows a mere 5% of the world's AI compute capacity is in the EU, while the United States commands nearly 75%. And this gap is widening. Europe's share has declined in recent years while the US is on track to add more capacity by 2028 than currently exists in all of Europe. Without the fundamental infrastructure to train and deploy advanced AI, the EU risks becoming a permanent consumer of technology shaped by others, undermining its own economic interests and values.
The Commission knows what's at stake. Its AI Continent Action Plan launched ambitious initiatives like AI Gigafactories and the Cloud and AI Development Act, yet these programs need a delivery mechanism to succeed. One promising approach is establishing dedicated Special Compute Zones with streamlined permitting and pre-cleared sites for AI infrastructure—areas where the regulatory framework matches the urgency of technological progress.
Earlier this year, CFG proposed a framework that would create a 'one-stop shop' for permits, with a legally mandated 180-day deadline for approvals. Projects meeting clear environmental and technical standards would proceed by default—providing the speed and predictability investors require. This follows the Chips Act’s ‘Integrated Production Facilities’, which created a similar ‘green lane’ to spur investment in semiconductor manufacturing, proving that streamlined approvals can accelerate strategic infrastructure without compromising standards.
Building AI datacentre infrastructure on European soil is a matter of both digital sovereignty and economics. Three major US hyperscalers control over 65% of the European market, which might create fundamental conflicts with its own data protection laws such as GDPR. US laws like the CLOUD Act allow American authorities to compel access to data held by US companies, regardless of where that data is stored. This means that data stored in a so-called ‘EU data region’ (i.e. in data centres located within the EU, so that data is subject to EU/EEA law and oversight) is not fully shielded from foreign access. This creates significant legal tensions for European public services, such as national healthcare systems holding electronic health records, and for sensitive industries like defence contractors handling military procurement data.
Beyond sovereignty, a lack of native infrastructure directly impacts Europe's innovation potential and economic competitiveness. Investments in sovereign AI infrastructure ensure that Europe’s strategic industries — from healthcare to energy — have access to advanced compute. They also help retain top talent and allow startups and universities to grow locally, reducing AI brain drain and reinforcing the domestic ecosystem. Furthermore, critical real-time applications in fields like advanced manufacturing or autonomous vehicles require ‘low-latency inference’ capabilities where delay of milliseconds can compromise industrial competitiveness—something that only local data centres can deliver.
Europe's AI datacentre deficit stems from structural barriers, not just funding gaps. Energy infrastructure constraints top the industry's list of concerns, and bureaucratic hurdles of regulatory compliance and permitting are the next biggest obstacles preventing investment—a web of local, regional, and national authorities that can delay projects for over four years. By contrast, the world’s largest AI supercomputer was built in just four months.
Apart from tackling the regulatory challenge of permitting, the Special Compute Zones framework can also help alleviate the industry's biggest physical challenge: securing power and land. The framework proposes earmarking specific brownfield industrial areas, especially decommissioned coal power plants, for development. These sites are ideal because they already possess the two most expensive and time-consuming components for a large AI datacentre: heavy-duty connections to the national power grid and appropriate industrial zoning (land already designated for industrial use). This strategy bypasses the multi-year, sometimes decade-long, queues for new grid connections and turns legacy fossil fuel infrastructure into assets for the digital transition. Successful projects in Greece, where former lignite mines are being redeveloped into datacentres, show that this path is viable.
Finally, Special Compute Zones could also enhance infrastructure security by explicitly dedicating some zones for highly secured facilities that will enable the EU to run critical workloads—such as health, defence, elections, and core public services—and also would position the EU as a trusted partner for international AI verification and cooperation.
Technological sovereignty in the 21st century is built on a foundation of sovereign infrastructure, and without decisive action, Europe will cede its digital future to foreign powers. Therefore, the European Commission has a time-limited opportunity to act. By adopting a strong Regulation to create Special Compute Zones, it can cut the red tape and build a foundation for genuine technological sovereignty.
