EU's €20B AI Hubs: Empty Demand?

The European Union is poised to announce plans for constructing large-scale AI computing hubs, a project estimated to cost over €20 billion ($23.5 billion). This initiative, set to formally launch with a call for proposals this spring, aims to establish four or five mega facilities across the continent.

However, the ambitious plan has encountered considerable skepticism from lawmakers and industry observers. Critics argue that there is a notable lack of domestic demand for such extensive infrastructure, with some questioning the fundamental business case. Concerns have been voiced that these datacenters might become "cathedrals in the desert" due to Europe's limited AI companies capable of utilizing such advanced computing power.

The push for computing sovereignty is a stated goal, aiming to reduce reliance on non-European infrastructure. This comes at a time when global tech giants are committing hundreds of billions to AI development, leading to broader discussions about potential overspending and the economic viability of such massive investments in an industry where many startups remain unprofitable.