AI Factory News: December 2025: The Rise of the Industrial AI Engine

Welcome to the December 2025 edition of AI Factory News. This month, the industry reached a definitive tipping point. The term "AI Factory" has officially transitioned from a high-tech concept into a physical reality that is reshaping global manufacturing, national sovereignty, and the backbone of the global economy.

In 2025, we aren't just building data centers anymore; we are building factories for intelligence. Here is why this month was the most important one yet for the AI Factory revolution.

1. Physical AI: When the Factory Floor Becomes "Aware"

The most significant breakthrough this month is the integration of Physical AI—intelligence that can see, reason, and act in the physical world.

• The FANUC & NVIDIA Alliance: On December 22, industrial robotics leader FANUC announced a landmark partnership with NVIDIA to bring "physical AI" into mainstream manufacturing. By using platforms like NVIDIA Isaac Sim and Jetson, FANUC is creating high-fidelity digital twins of entire factories, allowing robots to learn tasks in simulation before a single motor turns on the shop floor.

• Faraday Future’s Milestone: At the dedicated “FF aiFactory California” in Hanford, the first pre-production FX Super One vehicles began rolling off the assembly line this month. This $300 million facility represents the new gold standard for AI-driven automotive production.

2. Sovereign AI: The New National Infrastructure

Governments are no longer content with relying on foreign cloud providers. They are building their own "Sovereign AI Factories" to protect national data and foster local innovation.

• The EU’s 19-Factory Network: The European Commission’s EuroHPC Joint Undertaking has now selected 19 sites across Europe to host dedicated AI Factories. These hubs, including recent expansions in Spain, Poland, and Romania, provide the massive compute power necessary for startups to train the next generation of trustworthy AI models on European soil.

• UK AI Growth Zones: Following the government's announcement of a £10 billion investment in a South Wales AI Growth Zone, the UK is rapidly repurposing industrial heartlands into sovereign hubs. These zones offer fast-track planning and subsidized energy to turn Britain into a global leader in AI infrastructure.

3. The $500 Billion Backlog: The Business of Intelligence

The financial scale of the AI Factory movement is reaching unprecedented levels, showing that corporate demand is a "runaway train."

• Oracle’s Record Quarter: In its December earnings report, Oracle revealed a staggering $523 billion backlog in remaining performance obligations. This surge is driven by massive contracts for "sovereign cloud factories" from hyperscalers like Meta, NVIDIA, and OpenAI, signaling that the global economy is betting everything on the AI Factory model.

4. Science at Warp Speed: The "Genesis Mission"

Perhaps the most inspiring news comes from the intersection of AI and scientific discovery.

• NVIDIA & US DOE "Genesis Mission": On December 18, NVIDIA joined the U.S. Department of Energy for the landmark Genesis Mission. This initiative aims to build "autonomous labs"—specialized AI Factories for science—that use high-fidelity simulation and digital twins to accelerate breakthroughs in nuclear fusion, materials science, and clean energy.