Germany Launches €125M Competition to Build Europe's Frontier AI Companies

Summary

Germany's federal innovation agency SPRIND has launched "Next Frontier AI," a €125 million competition designed to fund and develop European frontier artificial intelligence labs that could become Europe's own versions of OpenAI or DeepSeek. The initiative comes amid growing European concern about dependence on American and Chinese AI leaders, as the US hosts most major AI firms while China rapidly advances with models like DeepSeek's V4.

The competition operates across three funding tiers over 24 months: up to ten teams will each receive €3 million in the first stage, up to six teams will advance to stage two with €8 million each, and up to three teams can secure up to €15.5 million in the final stage. SPRIND's head of challenges, Jano Costard, told Euronews Next that the agency expects "several hundred to thousands of applications" from across Europe.

While €125 million is substantial, Costard emphasized it represents only the first step. The agency's explicit goal is to use this funding to develop technology to a stage where it attracts billions in additional private investment. Rather than competing with current AI leaders on their terms, SPRIND is betting on European strengths: developing entirely new AI paradigms, leveraging industrial data and manufacturing expertise, and building privacy-focused approaches that could differentiate European AI from existing methods.

• European strategy prioritizes developing fundamentally new AI capabilities rather than directly competing with current market leaders
• Faster public funding processes and regulatory harmonization critical for Europe to retain top AI talent and scale startups