Pentagon Partners with 8 AI Powerhouses, Europe Still Perplexed on Building Artificial Intelligence Factories
REPUBLIKA.CO.ID, JAKARTA — The European Union’s plan to allocate more than 20 billion euros, or approximately 23.5 billion US dollars, to build a giant artificial intelligence (AI) factory has drawn sharp criticism, even before the project is officially launched. Several legislators and analysts are questioning the basis of the need and the economic viability of this ambitious project.
European Commission President Ursula von der Leyen first announced the plan in February 2025 as a response to the dominance of large-scale computing infrastructure by the United States. The project includes the construction of four to five mega-facilities, with the proposal submission process scheduled for this spring.
However, criticism has come from within parliament. German Green Party MEP Sergey Lagodinsky questioned the concrete objectives of the project. He stated that there has been no clear explanation regarding the business model or the real needs for such large-scale facilities.
“No one can explain what the business basis of these factories is,” he said, adding that the argument of “needing more computing power” does not sufficiently answer the fundamental question: what will that capacity be used for, as reported by Russia Today on Monday (5/5/2026).
Similar doubts have been expressed by analysts. Researcher at a Brussels-based think tank, Nicoleta Kyosovska, even described the project as potentially becoming a “cathedral in the desert”, physically large but with minimal utilisation. She assessed that only a handful of companies in Europe have the capacity to utilise infrastructure of that scale, one of which is the French AI startup Mistral.
On the other hand, the European Commission defended the plan by emphasising the importance of computational sovereignty. According to the Commission’s spokesperson, Europe needs to reduce its dependence on technology infrastructure from outside the region, especially amid increasing global competition in the AI sector.
This scepticism arises alongside broader concerns about the surge in global investment in the AI sector. Major technology companies such as Alphabet, Amazon, Meta, and Microsoft are reportedly planning to spend up to 725 billion US dollars on AI infrastructure in one year.
However, several experts believe the scale of such investments risks creating an economic bubble. New York University emeritus professor Gary Marcus described these expenditures as one of the most misguided capital allocations in history.
Technology analyst Ed Zitron also highlighted the weak economic fundamentals of AI data centres. According to him, many AI startups have yet to generate profits, while infrastructure project financing largely relies on high-risk credit schemes.