Artificial Intelligence Infrastructure and Regional Economic Transformation: Evidence from Emerging AI Clusters in Europe

Across Europe, the build-out of artificial intelligence infrastructure is being framed as a route to regional economic transformation. The European Union has selected nineteen AI Factories attached to its supercomputing centres, alongside thirteen smaller antennas, and has committed a twenty billion euro fund toward up to five AI gigafactories, while private capital pours into data centres from Ireland to the Nordic interior. This article asks which European regions are actually emerging as AI clusters, why, and whether hosting AI infrastructure transforms a regional economy or leaves an enclave. Drawing on agglomeration theory, the concept of absorptive capacity and work on regional value capture, and on current evidence on European compute infrastructure and AI investment, it argues that AI in Europe has two distinct geographies that only partly coincide. Compute spreads widely, including to peripheries chosen for power, land and cooling. Innovation, the talent, firms, research and capital that generate value, concentrates in a small number of metropolitan hubs: London, with several times the AI engineering workforce of any other European city; Paris, now ranked among the leading global AI hubs; and a second tier including Munich, Berlin and Zurich. Mapping this evidence, including a compiled dataset of the nineteen EuroHPC AI Factories set against national AI-investment figures, the article distinguishes four kinds of emerging cluster and argues that hosting infrastructure transforms a regional economy only where institutions and absorptive capacity convert compute into local capability. On the European map that convergence is the engineered exception, not the rule. The article sets out the policy mechanisms and the empirical agenda this implies.