EU to invest $1.4 billion in AI, cybersecurity, and digital skills to catch up with the US

The European Union (EU) is tired of playing catch-up in tech—and it’s putting $1.4 billion on the table to prove it.

On Friday, the European Commission announced it will invest €1.3 billion between 2025 and 2027 to boost artificial intelligence, cybersecurity, cloud infrastructure, and digital skills. The funding falls under its Digital Europe Programme and marks one of the bloc’s most targeted efforts yet to close the gap with the U.S. and other tech powerhouses.

The announcement comes just a month after France unveiled its own $112 billion AI investment plan—widely seen as a direct response to the U.S. Department of Defense’s Stargate initiative—as the global AI arms race gains momentum.

The Commission says the investment will support critical technologies that are central to Europe’s future—and to its independence from outside tech giants.

This next phase of the Digital Europe work program zeroes in on practical outcomes: helping businesses and governments deploy AI, hardening cyber defenses, expanding access to data infrastructure, and building digital talent from the ground up.

There’s also a push to expand access to generative AI in healthcare, strengthen the EU’s Digital Innovation Hubs, and ramp up projects like Destination Earth, which supports climate and disaster risk modeling. Other areas getting funding include public services, education institutions, and the EU Digital Identity Wallet.

“Securing European tech sovereignty starts with investing in advanced technologies and in making it possible for people to improve their digital competencies,” European Commission digital chief Henna Virkkunen said.

“With the opportunities under the Digital Europe Programme, we are ensuring that new technologies – and with them new potential – reach European citizens, businesses and public administrations,” she added.

The Digital Europe Programme has a total budget of €8.1 billion through 2027 and is the first EU initiative focused exclusively on accelerating digital adoption across sectors.

Just a year ago, the EU made headlines for another bold move: passing the world’s first comprehensive AI regulation. The EU AI Act, unanimously adopted by all 27 Member States, sets out strict rules on how AI can be developed and used across the bloc—marking a global first in regulating a technology that’s often moving faster than lawmakers.

Whether this new wave of funding moves the needle against the U.S. tech lead is up for debate—but the EU is clearly done waiting.