France retains lead in EU foreign investment as AI projects surge

For the seventh consecutive year France has been the top European destination for foreign direct investment, recording 852 projects in 2025, ahead of the United Kingdom’s 730 and Germany’s 548. Overall project numbers fell 17 % year‑on‑year, a sharper decline than in the UK, Germany or the EU average, reflecting broader economic uncertainty.

AI‑related investments stand out, with 53 foreign‑sourced AI projects – a 26 % increase – 36 % of which target data‑center construction. France’s largely decarbonised power mix, combining nuclear and renewables, is cited as a key advantage for energy‑intensive compute facilities. Recent initiatives include the AION consortium, formed by Iliad, Ardian, Artefact, Bull, Capgemini, EDF, Orange and Scaleway, which aims to build a gigawatt‑scale AI compute infrastructure worth about €10 billion.

Despite these strengths, the EY barometer warns that France’s attractiveness is not guaranteed. Factors such as fiscal competitiveness, labour and energy costs, and administrative complexity are eroding its edge, while Southern and Central European countries offer cheaper, more flexible regimes. The investment flow generated roughly 27,900 jobs, but only 57 % of investors expect to increase French exposure before 2026.