On January 21 2025, U.S. President Donald Trump announced the US Stargate Project, a $500 billion USD project to build artificial intelligence infrastructure in the US.

The Stargate Project is a partnership between OpenAI, Oracle, Japan’s SoftBank and MGX, an investment company run by the United Arab Emirates government.

Europe's Initial Response to Stargate Project

Reporters from Sifted, a European publication backed by the Financial Times, interviewed several prominent European tech leaders for their comment on the Stargate Project:

This should be a wake-up call for Europe,... The Stargate Project is an unequivocal claim by the USA to leadership in the field of AI. said Verena Pausder, chairperson of the German Startup Association.

This is more than a wake-up call; this is a slap in our face, said Christian Miele, general partner at venture capital firm Headline, which invests in French AI firm Mistral.

(2025) Founders and investors underscore the need for Europe to put more money behind AI Source: Sifted.eu

Reporters from CNBC also interviewed several prominent European tech leaders for their comment:

SAP CEO Christian Klein said that the Stargate Project should set an example for Europe:

It’s a great role model for Europe. ... Europe needs it the most, from my perspective. ... It’s not even the lack of financing — in Europe, it’s a question of who owns it, ... Who actually gives the order to say we digitize Europe, we digitize our agencies, and we are not doing it in silos, we are doing it as a union. ...

My hope is that ... everything that’s happened in the United States is certainly a wake up call. We need to see proof but I hope now Europe comes together and form a union in digitization, it’s super important,

Roland Busch, CEO of Siemens, also told CNBC that Europe needs to catch up with the US:

This is an engine which is moving very, very fast, so this is the point we have to [do] our homework, ... Just count the amount of data centers sitting in United States and being built in United States versus Europe.. Busch said Europe needs more data centers built closer to home so local companies can develop and operate powerful AI tools.

(2025) CEOs sound an AI rallying cry for Europe Source: CNBC

According to Politico.eu, European Commission President Ursula von der Leyen has talked big about the EU becoming a leader in AI innovation as part of a larger bid to help the region catch up with the U.S. and China.

French President Emmanuel Macron is aiming for a similar pitch at a global AI summit he'll host next month.

The size of the U.S. plan blows the EU investment plan, a mere €1.5 billion investment of which half comes from EU budget, out of the water, and reveals the U.S. focus on keeping up with China.

Europe – which has already lost out on social media, cloud and chips – looks already set to fall behind on AI.

(2025) Trump’s $500B AI plan is slap in the face for Europe Source: Politico.eu

Europe's Embrace of China's AI Leadership

A week after the anouncment of the US Stargate Project, a Chinese AI model named DeepSeek emerged as a fierce competitor to United States' AI industry leaders when it launched a cost competitive model that is 40 times cheaper than equivalent models from OpenAI while its quality is said to be on par with OpenAI's latest models.

www.deepseek.com

Politico.eu writes that the emergence of the cheap Chinese AI model could be considered a wake-up call for the US:

In just a week, Europe saw its artificial intelligence scene floundering in the face of American flexing, only to see it rebound with the rise of a cheap Chinese rival.

Europe doesn’t have the tech giants able to splash billions of euros on the AI hardware needed to train AI models. Last week, after the anouncement of the $500 billion USD Stargate Project, that was seen as a crippling factor for Europe.

But the rise of China's DeepSeek AI suggests European leading firms like France's Mistral, Germany's Aleph Alpha and many other, smaller ventures could also gain ground in the AI race — perhaps even on the cheap.

(2025) Europe’s AI hopes rebound after Chinese DeepSeek AI success Source: Politico.eu

Politico.eu writes that the rise of the Chinese budget competitor led to a market sell-off and that U.S. AI chip designer Nvidia lost $600 billion in valuation as a result of the cheap Chinese AI rival.

Shortly after the release of Chinese DeepSeek AI, OpenAI launched a new model named o3 deep research agent that is much faster and efficient than previous models.

European AI Investment in response to Chinese DeepSeek AI

The emergence of DeepSeek AI caused the European Union to write a $56 million check for European researchers to build a large language AI model to rival both its American and Chinese competitors.

Forbes writes: Deepseek has reignited interest in open source AI in Europe.

The investment will fund top researchers from a handful of companies and universities across EU countries as they develop a large language AI model that can work with the trading bloc’s 30 languages. The project will also tap into supercomputers from companies like Spain’s Mare Nostrum and Italy’s Leonardo, both of which have received funding from the EU.

(2025) The EU Is Betting $56 Million On Open Source AI Source: Forbes

Some investors are critical on Europe's new low budget open source AI approach.

Rasmus Rother of Merantix Capital said Sprinkling money around in a fragmented fashion is more about PR than driving actual results and impact,

AI data centers, especially those powering AI, are energy-intensive operations.

According to Politico.eu, President Trump has embraced the drill baby drill slogan and declared a national energy emergency to boost gas and oil production for the purpose of powering huge energy hungry AI data centers.

We don't have these Big Tech champions that the U.S. has; we don’t have this luxury of being able to work with them in order to mobilize private capital, ... I cannot think of, let’s say, French Mistral being able to mobilize this kind of investment capacity and building these huge AI data centers, said Giorgos Verdi, policy fellow at the European Council for Foreign Relations.

Olivier Blum, CEO of Schneider Electric, said to CNBC that his company has had a massive boost from the $500bn Stargate Project, given its place in AI chip giant Nvidia’s supply chain. Like Roland Busch, CEO of Siemens who was cited earlier, he suggested governments ought to be working as allies rather than competitors on AI initiatives.

All the countries are looking at [how to foster AI development] — it's important, of course, and we respect what the governments want to do

But at the end of the day, we have to understand that every company in the world is becoming more and more global. So government also has to understand that if they want to have their own domestic companies to be successful outside their home country, they need to find some common agreement. So sovereignty is important, but at the same time every company has to go beyond its own country and [be] willing to find a common ground to operate.

More information about the US Stargate Project can be found on openai.com.