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Google, Microsoft Lead AI Infrastructure Spending Surge in Europe: EU’s AI Act Unexpected Driver of Tech Investment

Last Updated June 8, 2024 11:12 AM
Giuseppe Ciccomascolo
Last Updated June 8, 2024 11:12 AM

Key Takeaways

  • Microsoft and Google are making significant investments in AI research and infrastructure in Europe.
  • Also, Tesla is pouring money into the Old Continent, especially in Germany and Spain.
  • The EU AI Act, which sets regulations for AI development and use, is seen as a positive factor by some companies.

Tech giants Google and Microsoft are making significant strides in Europe, pouring billions into artificial intelligence (AI) infrastructure across France and Sweden. Tesla is also making huge investments in AI infrastructure in the Old Continent.

These strategic moves come after the European Union (EU) approved its landmark AI regulations, shaping the future of the technology within the bloc.

Microsoft And Google Invest In EU

Google parent company Alphabet and Microsoft announced significant investments in artificial intelligence in Western Europe, after the European Union approved the first AI regulation in the World.

Alphabet is launching  a new AI hub in Paris, which will eventually host over 300 researchers and engineers, including members of the Chrome and YouTube development teams. The hub aims to accelerate the development of AI-based products in France, foster new academic and research partnerships, and increase the adoption of AI tools among French workers.

France is positioning itself as a European leader in AI development. For instance, Mistral AI, a French AI company founded in April 2023 by former Google DeepMind and Meta researchers, has already achieved a valuation of about $2 billion and raised approximately $415 million in its early funding round.

Meanwhile, Microsoft announced  a SEK 33.7 billion ($3.2 billion) investment over two years in cloud and AI infrastructure in Sweden, marking its largest investment in the country. The company plans to train 250,000 people by 2027 to boost AI knowledge and competence and will increase capacity at its three data centers in Sweden.

This investment is part of Microsoft’s broader commitment to the EU. The company has also unveiled a €4 billion investment to expand its next-generation cloud and AI infrastructure in France, including the addition of up to 25,000 advanced GPUs by the end of 2025. Microsoft will expand its data center footprint in the Paris and Marseille regions and plan a new data center campus in the Grand Est Region, specifically in Mulhouse Alsace Agglomération.

Also Tesla Pour Money In Europe

In its latest earnings report, Tesla revealed  that it spent $1 billion on artificial intelligence infrastructure in the first quarter. Despite reporting falling profits and negative cash flow during a recent earnings call, the electric vehicle company highlighted its AI investment as a key driver for future growth.

Tesla, which already operates a factory in Germany, is reportedly in negotiations with regional authorities in Valencia, Spain, to enhance its AI leadership there. A spokesperson for the regional government told Reuters  that they have held meetings with an unidentified company about a “large investment in the automotive sector” but declined to provide further details due to the confidentiality of the negotiations.

Another source confirmed that the company in question is Tesla. According to the economic paper Cinco Días , the investment is expected to involve the construction of an automotive plant and could total up to €4.5 billion. This investment aligns with the scale of Tesla’s planned gigafactory in Monterrey, Mexico.

How EU AI Act Helped Attracting Investments

As artificial intelligence transforms every aspect of our lives—from healthcare and education to finance and entertainment—the need for comprehensive regulation has become increasingly urgent.

The European Union’s AI Act (EU AI Act) emerges as a pioneering legislative framework designed to harness AI’s transformative power while safeguarding fundamental rights and ensuring safety, privacy, and ethical standards. This landmark regulation represents a significant step toward creating a balanced ecosystem where innovation thrives within clearly defined ethical and legal boundaries.

For AI companies operating within and beyond the European Union, the EU AI Act is not merely another regulatory challenge; it is a unique opportunity, according  to experts of TrustPath. It offers a chance to lead by example, build trust with users and consumers, and secure a competitive edge in a rapidly evolving market. Early adoption of the EU AI Act goes beyond mere compliance – it’s about embracing a future where responsible AI becomes the norm, not the exception.

As we enter this new regulatory era, AI companies must recognize the multiple benefits that early adoption of the EU AI Act can bring. These advantages are profound and far-reaching, enhancing trust and credibility, fostering innovation, and securing a competitive advantage.

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