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Germany is launching a €125 million artificial intelligence (AI) competition to help Europe build its own frontier artificial intelligence labs amid a global race.
The initiative by Germany’s federal innovation agency SPRIND, called “Next Frontier AI,” aims to fund companies that could eventually become Europe’s own OpenAI or DeepSeek.
Next Frontier AI comes as governments across Europe are becoming more concerned about dependence on American and Chinese AI companies.
“Germany is leading this because we have no time to waste in waiting for other actors to get in that space. A competition globally is not waiting. So we need to act now. And that’s why we do this in a European manner,” Jano Costard, SPRIND’s head of challenges, told Euronews Next.
Most leading AI firms, including OpenAI and Anthropic, are based in the US and have raised billions of dollars in private investment. China is also moving quickly. DeepSeek released its V4 model in April, adding pressure on Europe to build stronger AI companies of its own.
SPRIND’s initiative will run in three stages over 24 months, according to the agency.
In the first stage, up to ten teams can each receive up to €3 million in funding. Up to six teams will continue to the second stage with funding of up to €8 million each. In the final stage, up to three teams can receive up to €15.5 million each.
Costard said the agency expects “several hundred to thousands of applications” from across Europe.
Is €125 million enough?
However, with the US and China pouring billions into frontier AI, €125 million is unlikely to be enough on its own to give Europe an edge.
“The 125 million euros that we provide are only the first step,” Costard said.
“It is the very explicit goal of this challenge to be able to unlock billions in additional funding. So what we use the 125 million for is kind of building the tech to a stage where we really see the potential of these new AI paradigms that we are after,” he added.
For a company to “provide the billions in euros”, which Costard says will definitely be possible, he believes Europe needs to focus less on improving current AI systems and more on trying to develop entirely new approaches.
“We cannot try to compete with today’s Anthropic and their products,” he said. “We need to rely on our ability to create new paradigms, new capabilities for AI that the current methods cannot develop,” Costard said.
Smoother public funding will be key for Europe in the AI race
Part of the initiative is also tied to a wider European debate about technology sovereignty and startup growth.
European policymakers and founders have increasingly argued that promising startups often struggle to scale in Europe and eventually move to the US.
In March, the European Commission formally proposed the EU Inc, a single company law across the continent.
While Costard agrees that a more borderless European startup environment would help, he said public funding also needs to become faster and less cumbersome if Europe wants to keep top AI talent.
According to Costard, Europe’s best chance may lie in its own strengths such as industrial data, manufacturing know-how and privacy-focused AI.
“We don’t lack in the research pedigree,” Costard said.
“It’s not that we lack the technological ability. I think what we lack is the ability to translate that into companies, into products and services that make up the Anthropic, the OpenAI, the DeepSeek of our time”.