France unveils its answer to Stargate – will it put Europe in the AI race?

With its strong nuclear energy sector and deep tradition in mathematics, France is well-positioned to take charge of Europe’s artificial intelligence (AI) scramble against the US and China.

France has announced €109 billion ($112 billion) in AI investments over the next few years, which should put the country – and, by extension, the rest of the EU – as contenders in the AI race that has so far been dominated by the two superpowers.

President Emmanuel Macron announced the investment in an interview with France 2 television ahead of this week’s AI Action Summit in Paris and said it was in response to the Stargate project in the US.

“It’s the equivalent for France of what the US announced with Stargate,” Macron said, noting that “Europe and France must accelerate their investments.”

Stargate, a $500 billion AI infrastructure project led by OpenAi and Softbank, was announced by US President Donald Trump in January. Trump said the new venture would ensure the US stays ahead of China and other rivals in the global race to develop AI.

This heightened Europe’s fears of becoming a “digital colony,” something that French legislators warned could happen in a report last year if the EU falls further behind its peers in the US and China.

The AI space was further shaken by the launch of DeepSeek, a Chinese chatbot with similar capabilities to Western counterparts like OpenAI’s ChatGPT but reportedly developed at much lower cost.

While this led to a moment of reckoning among American AI firms, it was seen across Europe as an opportunity, signaling that the US domination in the industry can be challenged.

In addition to French AI efforts, more than 60 leading European companies, including Airbus, ASML, Siemens, and Spotify have signed a new EU AI Champions Initiative, with 20 international investors, including Blackstone, DST Global, and KKR pledging to spend €150 billion on AI projects in Europe over the next five years.

"France has created a playbook that other European nations should follow,"

says OpenAI CEO Sam Altman.

France, in particular, has a lot to gain from Europe’s push for so-called digital sovereignty. The country has a booming tech scene, which produced Mistral, a Paris-based startup and the continent’s only well-known AI company building large language models.

Mistral announced plans to build its own data center in France, worth several billion euros, to secure its independence. Set to open later this year, the center is part of France’s broader AI push.

The United Arab Emirates will provide a significant share of funding for the French Stargate project, with up to €50 billion ($52 billion) earmarked for AI infrastructure, including Europe’s largest data center campus at a yet-to-be-determined location.

The UAE-backed MGX investment fund, which has already invested in the American Stargate project, will also invest in the French undertaking that will include a 1 gigawatt data centre. Canadian investment firm Brookfield will also invest €20 billion in AI projects in France, including a data center.

"Pivotal moment"

France is leaning on its plentiful nuclear energy to turbo-charge AI computing that requires vast amounts of power. The country’s other strengths include its deep pool of talented mathematicians. France trails only the US in the number of Fields Medals, often called the Nobel Prize of Mathematics.

While this may be harder to emulate, much of the French success depends on the regulatory environment and policies that encourage innovation, OpenAI CEO Sam Altman said in an op-ed published by Le Monde.

“On AI, France has created a playbook that other European nations should follow,” Altman said, adding that “France’s success to date is the result of policies that encourage innovation and create conditions that allow its companies to succeed.”

The EU AI Champions Initiative seeks to address some of these issues and even promises to “re-write the AI playbook” in order to unlock Europe’s full potential.

According to Jeannette zu Fürstenberg, managing director and head of Europe at General Catalyst, one of the financial backers of the plan, the continent has a “generational opportunity by leading in applied AI.”

The announcement of new investment appears to have breathed new life into European tech ambitions. “The AI race is far from being over, it has only just begun,” said Gundbert Scherf, co-founder of Helsing, a Munich-based AI defence company.

For Arthur Mensch, co-founder and chief executive at Mistral, the new efforts marked a “pivotal moment” for corporate leaders to transform Europe’s economy.