Spain could become the site of one of five European AI gigafactories funded by the EU’s investAI program, which has a €20 billion budget. The scale of this project could not only mark a significant economic milestone but also redefine the nation’s role in Europe’s digital and industrial transformation.
The national focus is on two major projects that, if successful, could mark a new chapter in the long-standing rivalry between Ignacio Sánchez Galán, Chairman of Iberdrola, and Florentino Pérez, head of ACS.
Tarragona: Telefónica and ACS’s Bold Move
One project would be situated in Móra la Tova (Tarragona), near the Barcelona Supercomputing Center, Europe’s high-performance computing leader. The initiative is led by a consortium with Telefónica acting as the primary coordinator and ACS contributing its expertise in data center construction as a key industrial partner.
This proposal boasts strategic partnerships with Nvidia and other AI hardware and software vendors, strengthening its appeal to Brussels. It is also part of the Spanish Society for Technological Transformation, linked to the Ministry of Digital Transformation.
Estimated costs are around €5 billion, with a roadmap targeting initial phases by 2027.
Álava: Iberdrola and Merlin’s Energy-Driven Approach
The second major bid, led by Iberdrola, adopts a different strategy through its CPD4Green subsidiary, focusing on sustainable data centers. Iberdrola has joined forces with Merlin Properties, a real estate firm developing data center campuses in Álava and Lisbon, which would serve as the central infrastructure.
This plan involves Portuguese energy firm EDP as an energy partner and emphasizes ensuring a reliable electricity supply to meet the high demand of these facilities. Iberdrola believes its renewable assets and pre-permitted land give it a competitive edge.
Sources close to the project suggest this plan could be operational by 2026, a year ahead of Tarragona’s, with a slightly lower investment required.
A Business Rivalry with Corporate Revanche
This emerging competition between giants revives a corporate duel from 2006, when ACS’s stake in Iberdrola sparked a fierce battle that ended in rupture. Now, two decades later, the battle is reimagined in the strategic realm of AI and digital infrastructure.
The contest might not be just about prestige but involves a business poised to move tens of billions of euros and shape Europe’s technological landscape for decades to come.
Europe’s Quest for Technological Sovereignty
The EU’s investAI program arrives at a critical juncture. Brussels fears the continent’s lag behind the US and China in AI dominance.
Of over 70 submissions across Europe, only five will be selected. Final decisions will consider financial factors alongside strategic ones such as energy capacity, technological alliances, social impact, and contributions to European digital sovereignty.
Spain, already among the favorites, faces a dilemma: it’s unlikely to host two gigafactories, potentially pitting Telefónica-ACS against Iberdrola-Merlin in a direct contest.
Schedule and Expectations
Vendors must submit binding bids by October, with the EU expected to decide by late 2025. Meanwhile, Spain’s government is actively supporting both projects, knowing that hosting one would position the country as a leader in AI in Southern Europe.
Whether in Tarragona or Álava, these projects would serve as engines for investment, employment, and talent attraction, while also catalyzing broader ecosystems involving startups, universities, and research centers related to AI.
FAQs
1. What is an AI gigafactory?
Large-scale facilities designed to house the computational power needed to train and run advanced AI models. They include data centers, specialized power supplies, and high-capacity network connections.
2. Why is Spain a candidate for such a facility?
Because of robust energy connections, available land, and partnerships with leading telecom and energy firms. Its strategic location in Southern Europe also enhances global connectivity.
3. What economic impact could a gigafactory have on Spain?
It could attract billions in investment, create high-skilled jobs, and reinforce Spain’s position as an AI hub in Europe.
4. How do the Tarragona and Álava proposals differ?
Tarragona’s proposal, led by Telefónica and ACS, leverages proximity to the Barcelona Supercomputing Center and alliances with Nvidia. Álava’s, led by Iberdrola and Merlin, emphasizes energy security and is expected to come online sooner.
5. What role does the European Commission play?
It will select five projects from over 70 candidates to promote European technological sovereignty and reduce reliance on foreign powers in AI.
Sources: Vozpopuli, EU Digital Strategy