Startup Europe — The Sifted Podcast Is Europe’s AI infrastructure build-out heading for a gigafactory-style bust?
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Jan 15, 2026 
Daphné Leprince-Ringuet, a senior AI reporter from Paris, and Freya Pratty, a London-based expert on European startups, dive into the hot topic of Europe's AI infrastructure build-out. They discuss the urgency behind government investment in data centers and the strive for cloud sovereignty, while warning against the risks of overbuilding reminiscent of past gigafactory failures. The duo explores the tension between Europe's ambitions and dependence on Nvidia, the potential of startups in this realm, and whether AI infrastructure might be the next bubble to burst.
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Sovereignty Became A Geopolitical Imperative
- Europe is racing to build sovereign AI compute because dependence on US hyperscalers feels politically risky.
- The Stargate announcements and US policy moves crystallised infrastructure as a national prestige metric.
Energy Costs Shape Where Data Centers Land
- Governments name growth zones and promise billions but energy costs and planning slow real buildouts.
- Cheap energy regions like the Nordics and Iberia look more economically sensible for data centers.
Play The Periphery, Not The Build
- Expect large asset managers and infra funds to lead builds rather than typical VCs or small startups.
- Focus startup bets on peripheral tech like cooling, memory or operational software instead of raw data-centre construction.