EU Member States are currently designing two possible new Important Projects of Common European Interest (“IPCEIs”) to support the development of AI and compute infrastructure in the EU (together the “Digital IPCEIs”), subject to European Commission (“Commission”) approval.

On 10 March 2026, the “matchmaking” phase under the IPCEI on Artificial Intelligence (“IPCEI-AI”) was officially launched in Berlin. It brings together companies whose AI projects have been pre-selected through national calls for expressions of interest (“CEIs”) in each participating Member State. Its objective is to form European consortia eligible for State co-funding under the IPCEI-AI. National CEIs in 17 participating Member States are now closed; Finland and Lithuania are still expected to launch their CEIs.

A second digital IPCEI on Compute Infrastructure Continuum (“IPCEI-CIC”) was launched in late 2025 by 15 Member States. Several of these participating Member States – including Belgium, Croatia, Estonia, Finland, France, Germany, Hungary, Lithuania, the Netherlands, Romania, Slovakia, and Spain – have not yet launched their CEIs.  

Key takeaways

• The two Digital IPCEIs are moving forward. The IPCEI‑AI has entered the “matchmaking” phase following national pre‑selection. The IPCEI‑CIC is still in early stages, with several Member States yet to launch their national CEIs.
• Direct participation in IPCEIs is reserved for projects pre-selected by participating Member States. Companies not selected as direct participants may engage as associated or indirect partners, subject to specific collaboration and eligibility conditions.
• Early and robust project preparation is critical to obtain State aid under the IPCEI. Pre‑selected companies must substantiate their projects through detailed documentation showing compliance with the conditions of the IPCEI Communication (2021).

I. IPCEI: State Aid Instrument to Boost Europe’s Competitiveness

IPCEIs are financed through national State aid measures coordinated between Member States (for more details, see our blog). They have become an increasingly important industrial policy instrument in the EU. They support strategic innovation and infrastructure and contribute to the EU’s goals of sustainable growth and competitiveness.

Both IPCEI-AI and IPCEI-CIC form part of the Commission’s “AI Continent Action Plan” (April 2025), which aims to position Europe as a global leader in AI. This objective is to be achieved by strengthening AI capabilities and facilitating access for EU companies of all sizes to AI technologies and services.

A. The IPCEI-AI

The IPCEI-AI’s objective is to create an AI ecosystem in Europe and to support the development and deployment of AI solutions for industrial use.

It adopts a systematic approach spanning the entire lifecycle of AI models, including a wide range of R&D areas eligible for funding such as:

1. Development of a next‑generation European AI continuum, including R&D of open, competitive AI foundation and frontier models, enablement of sovereign European cloud services and core components for AI training and deployment, and development of energy‑efficient technologies for AI training and operation.
2. Secure and safe access to high‑quality data for AI, including technologies enabling availability and access to high‑quality, structured datasets compliant with EU data protection and security rules.
3. Development of advanced AI‑as‑a‑Service (“AIaaS”) solutions, particularly for SMEs, including tools and frameworks supporting AI model development and deployment.
4. Development of a common open‑source AI framework to ensure security and interoperability.
5. Integration of next‑generation AI models into applications and interconnection services, including areas such as telecom network services.

More information can be found in the value chain document (August 2025).

B. The IPCEI-CIC

The objective of the IPCEI-CIC is to develop a sovereign computing infrastructure in Europe, including the deployment of AI solutions. Supported projects should contribute directly to the development of the European digital value chain, ranging from the construction of data centers to the provision of cloud services. This should enable the training, use, and development of AI models, close to where the data is generated.

In-scope projects should focus on:

1. Infrastructure deployment: scalable Infrastructure-as-a-Service (“IaaS”) deployment, competitive European cloud and AI services, state-of-the-art European cloud and AI energy-efficiency technologies, and regional infrastructure deployment.
2. Federation and connection of sovereign EU-wide cross-border interconnected infrastructures into a compute continuum: integration into a common architecture framework software components already being developed in the IPCEI Cloud as part of the “8ra” umbrella initiative.

Examples of areas that project proposals could address include regional “AI satellites” linked to “AI‑Factories” or “AI-Gigafactories” and autonomous driving or advanced driver assistance systems. More information can be found in the common project description (October 2025). For more details on the Commission’s Apply AI Strategy (October 2025), see our blog.

II. Who is Eligible to Participate in National CEIs?

Companies of all sizes and from all sectors that operate in the EU can participate, provided they align with the conditions of the IPCEI Communication (2021) and the CEI requirements.

Companies may participate to IPCEIs either as “direct participants”, which receive funding directly under the IPCEI instrument, or as “associated partners”. Associated partners must contribute to the objectives of the IPCEI and establish effective cross-border collaborations with direct participants. They can be supported through a national or regional funding scheme, including the General Block Exemption Regulation (“GBER”), the Framework for State aid for research and development and innovation (RDIF) or EU funds, instead of through the IPCEI State aid.

In previous IPCEIs, the Commission allowed Member States to join an existing, aided, IPCEI and grant State aid for their individual projects (see for instance, Austria joining the 2018 IPCEI on Microelectronics).

Additionally, companies that may not participate in the national pre-selection process may still be involved as “indirect partners”, provided they collaborate with at least one IPCEI direct participant or associated partner. Indirect partners are assessed at national level, and they may or may not receive public funding, including support under the GBER or other EU funds. They can then benefit from the IPCEI ecosystem (e.g. networking, RDI results).

III. What Comes Next?

For the IPCEI‑CIC, interested companies should track upcoming national CEIs from participating Member States to submit their projects. In practice, companies must apply through the relevant national agency in each participating Member State, by submitting a standardized outline project proposal.

After national pre-selection, the coordinating Member State – for instance, Germany for the IPCEI-AI – organizes “matchmaking” sessions between potential IPCEI direct participants. The purpose is to foster collaboration and identify synergies where pre‑selected projects can complement one another, demonstrating the IPCEI’s integrated nature and enabling potential IPCEI direct participants to jointly define appropriate work streams.

Following the “matchmaking” events, the coordinating Member State begins to draft the so-called “Chapeau document.” That document serves as the structure of the project to show compliance with key IPCEI requirements. Other participating Member States and pre-selected companies must contribute with the necessary input.

Companies should, in parallel, prepare their project documents based on templates and guidance provided by participating Member States. The documentation typically comprises three key elements: (i) the “Project Portfolio”, designed in particular to demonstrate breakthrough innovation; (ii) the “Funding Gap Questionnaire”, a financial tool used to demonstrate the need for aid and to calculate the requested amount of aid; and (iii) the “Prodcom” analysis, intended to assess the potential competitive impact of the aid. This preparatory work is critical, as projects that are insufficiently developed or of low quality at the pre‑notification stage may be excluded from the benefit of State aid.

Once all participating Member States have assessed, approved and confirmed the pre-selected projects of potential IPCEI direct participants, they submit a pre-notification to the Commission. During this phase, the Commission assesses project documents, as well as the Chapeau document, and issues requests for information (“RFIs”) where necessary.

Once the Commission deems that the file is complete, Member States can notify formally. This phase ends with the adoption of a formal Commission decision. Member States can then sign the funding agreement with each company, enabling operational implementation of the IPCEI.

IPCEI aid is granted after a complex selection process generally taking more than two years, including the State aid approval procedure spanning over one and a half years. Therefore, early preparation and expert advice are key to avoid delaying State aid approval of IPCEIs.

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Covington uniquely combines State aid and AI expertise to help companies navigate the legal and strategic complexities of IPCEIs. Please contact the authors of this article for more information.