existing engineering skill base tied to these platforms and convenient access to existing AI models via their APIs (Kedrosky 2024). Private credit providers and asset manag ­ers that want exposure to the AI data centre buildout prefer hyperscalers because of their investment grade status, sta­ble demand and strong cash flows. These structural incen­tives together create a gravitational pull towards the AI compute market that affects policy implementation. This can lead to counterintuitive policy outcomes, such as the case of a recent European Investment Fund(EIF) data cen­tre investment described below. 3.5 Industrial policy for hyperscalers? The case of EIF, the CDP and Apto’s ­Lacchiarella site To illustrate the structural incentives that favour hyperscalers in arms-length industrial policy interventions, consider recent efforts by the European Investment Fund(EIF) and the Italian national development bank Cassa depositi e Prestisi(CDP) to support European technological independence. On 12 May 2025, CDP and EIF jointly announced a€200 mil ­lion cornerstone, catalytic investment to Allianz SE subsidiary PIMCO’s European Data Centre Opportunities(EDCO) Fund, which was set up to support the development of European data centre infrastructure. 28 The data centres will be built by PIMCO’s fully owned subsidiary Apto. Just two days later, Apto announced a new project in Lac­chiarella, near Milan. 29 The project was announced as the largest data centre campus in Italy, with an estimated area of 228,000 m 2 , 300 MW of power consumption and an esti ­mated€3.4 bn of total planned investment. Nominally, this seems like a substantial investment to support the develop­ment of digital sovereignty in the EU. Indeed, in the press release of the investment, the CEO of CDP noted that: “investment in the PIMCO European Data Centre Opportunity Fund reflects CDP Equity’s strong commitment to accelerating digital transformation and strengthening strategic infrastruc­ture in Italy and across Europe. By supporting data centre development, we are helping to lay the foundations for a more competitive, innovative and resilient digital economy”, with the Chief Executive of the EIF echoing the sentiment, noting that the 28  See EIF´s announcement at: https://www.eif.org/press/all/eif-and-cdp-equity-jointly-invest-eur200-million-in-the-pimco-european-data-centre-opportunity-fund-to-expand-­digital-infrastructure-across-europe.(last accessed on 23 April). 29  See Apto´s announcement at: https://aptodc.com/apto-announces-plans-for-italys-largest-data-centre-campus/.(last accessed on 23 April). Presumptive location of the site in the fields of Lacchiarella Challenges for the EU AI Cloud 23