The Complete Guide to Using AI in the Government Industry in Luxembourg in 2025

In 2025 Luxembourg has pushed AI to the top of its agenda: the government's “Accelerating digital sovereignty 2030” initiative names artificial intelligence, data and quantum technologies as national priorities and ties strategy to ministries of Digitalisation, Economy and Research (Accelerating Digital Sovereignty 2030 initiative - Luxembourg government); Luxinnovation highlights the push to scale AI ethically across sectors and help firms find funding and partners (Luxinnovation coverage of the national AI initiative).

Practical steps are already rolling out: a joint call for AI–HPC projects aims to pair industry with public research to fast-track pilots and build capacity (AI‑HPC joint call for projects - Research‑Industry Collaboration Luxembourg), while national investments such as the MeluXina‑AI programme and SME packages signal Luxembourg is buying the infrastructure and support needed for meaningful government adoption.

“AI is no longer a myth, but a reality.”

Luxembourg's political case for AI is rooted less in novelty than in strategic necessity: the 2025 State of the Nation frames AI as a pillar of digital sovereignty, economic competitiveness and national resilience, with concrete investments and institutions to match (see Luc Frieden's address for the full roadmap).

At stake is who controls sensitive data and the tools that turn it into value - not an abstract race, but a practical choice to host secure infrastructure at home rather than depend on foreign providers.

The Government has pledged to mobilise resources (including a €3 billion public‑private push over six years), build one of the first EU “AI Factories”, deploy an AI‑focused supercomputer and a quantum capability, and support SMEs and start‑ups to absorb these innovations; planned pilots span a national large‑language model trained on legislation and AI tools to refine labour‑market matching at ADEM. All of this is explicitly tied to a pragmatic implementation of the EU AI Act and a human‑centred approach to ethics, so policy and politics push investment as both an economic and sovereign priority (read a concise summary of the digital sovereignty plan here).

“We want an AI based on trust and transparency, putting innovation at the service of humanity. An artificial intelligence based on European values with a Luxembourg touch”

Key national programmes and infrastructure now form the practical backbone for Luxembourg's AI ambitions: the Luxembourg National Data Service (LNDS) is architecting a national Data Factory to turn raw public data into FAIR, reusable “data products,” while the Luxembourg AI Factory (L‑AIF), launched in April 2025 and backed by MeluXina-class supercomputing, offers experimentation, HPC access and mentoring to help SMEs and public bodies pilot trustworthy AI; together they answer a central aim of the national data strategy to build a sovereign, interoperable ecosystem.

These initiatives sit inside a coordinated governance stack - a national data catalogue, secure processing environments and LNDS services for cataloguing, anonymisation, ELSI review and access requests - designed to cut through data silos and speed reuse in regulated sectors (finance, health, mobility).

The scale of the prize is vivid: with research noting that roughly 80% of industrial data is never reused, the Data Factory + AI Factory pairing is intended to unlock that “goldmine” for public value and commercial innovation across Europe.

For a concise roadmap, see LNDS' overview of the Data and AI Factories and the Luxembourg Data Strategy summary.

“This vision is based on three new strategies: on data, artificial intelligence and quantum technology. Together, they form a coherent and unique vision that is unrivalled in the world.”

The Luxembourg National Data Service (LNDS) is turning the abstract promise of “data as infrastructure” into operational reality by building a Data Factory that makes public-sector data findable, interoperable and ready for reuse - effectively supplying the high‑quality inputs that the Luxembourg AI Factory needs to train trustworthy models; see LNDS' long read on the Data and AI Factories for how the centres work together (LNDS: a look into the Data and AI Factories).

Rather than leave a “goldmine” untapped - research shows about 80% of industrial data is never reused - this national approach standardises an End‑to‑End Data Journey that connects data users, stewards and providers, shortens access cycles and embeds legal, ethical and technical safeguards so teams can focus on impact rather than plumbing (End‑to‑End Data Journey - LNDS).

The result is a virtual coordination layer that catalogs, anonymises and enriches datasets into FAIR, reusable “data products,” enabling public bodies and SMEs to pilot services in secure processing environments and to scale with greater legal certainty across regulated sectors like finance and health.

“By standardising this data journey, we can standardise the roles and responsibilities of all actors, the processes and tools, to achieve its goals faster, more securely and more efficiently.”

The Luxembourg AI Factory (L‑AIF), officially launched in April 2025, turns national strategy into a hands‑on service: it pairs the AI‑optimised supercomputer MeluXina‑AI (with over 2,100 GPU‑AI accelerators) and a cross‑institutional consortium to give startups, SMEs and public agencies fast, secure pathways from idea to production.

Designed as one of the first European “AI Factories”, L‑AIF offers experimentation sandboxes, HPC access, mentoring, training and tailored onboarding - with particular attention to finance, space, cybersecurity and the green economy - so teams can test models on high‑quality data and scale with legal and ethical guardrails in place (see the CORDIS project fact sheet and LNDS' briefing on how the Data and AI Factories work together).

Coordinated by LuxProvide and run with Luxinnovation, LNDS, LIST and the University of Luxembourg, the Factory lowers the technical and administrative barriers that often stall public‑sector pilots: think secure compute, curated datasets, co‑design support and funding pathways, all connected to Europe's AI‑HPC network to accelerate trustworthy, sovereign AI for Luxembourg and beyond.

“This vision is based on three new strategies: on data, artificial intelligence and quantum technology. Together, they form a coherent and unique vision that is unrivalled in the world.”

AI in Luxembourg's public and private sectors has moved decisively from pilots to practical rollout, but the picture is mixed: PwC's (Gen)AI and data use in Luxembourg survey 2025 shows rapid momentum - 101 respondents (74 from finance) report 88% collect data to boost operational efficiency, 64% of operational firms use third‑party GenAI and 57% of banks are building internal tools - yet only half achieve high maturity in data governance and 20% aren't using most of the data they collect, a reminder that capacity gaps still limit impact; alongside this, PwC's DORA briefing finds nearly half of financial firms expect AI to cut costs by ≥10% and stresses that failure to adopt AI risks competitiveness, turning regulation into a catalyst for transformation.

The result is a pragmatic, sector‑led adoption pattern: personal productivity wins first, finance drives production use, and public bodies can piggyback on these use cases while closing data‑strategy and skills gaps identified by labour‑market studies.

For a concise overview, see PwC's survey and its DORA analysis for how regulation and economics are accelerating adoption in Luxembourg.

“Luxembourg stands at a crucial moment where AI ambition, regulatory certainty, and market readiness converge. Organisations that act decisively now - building both technical capabilities and valuable use cases - will define the next chapter of our digital economy.” - Thierry Kremser, PwC Luxembourg

For Luxembourg's public bodies the legal and ethical checklist is no longer optional: national law has formally mapped who will enforce the EU AI Act and how, with the National Commission for Data Protection (CNPD) appointed as the default competent authority and a set of sectoral market‑surveillance and notifying authorities named in the government bill that aligns local rules with Regulation (EU) 2024/1689 - meaning public agencies must treat oversight, documentation and risk classification as day‑to‑day operations rather than one‑off tasks (see the Luxembourg bill designating national authorities under the EU AI Act).

“What makes this regulation unique is its risk-based approach.”

Start small, standardise fast and bake governance into every step: run a light pilot to map who produces and uses which datasets (as AEV did in 2023), then adopt a shared metadata model and the LNDS Metadata Capture System (MDC) during a 2024 tool‑development phase, define clear registration, approval and user‑role workflows, and train teams so the catalogue becomes part of daily operations - not an afterthought; the Environment Agency example shows how a seed catalogue of nearly 400 datasets was imported and the production system launched on 13 May 2025, proving that disciplined cataloguing unlocks reuse rather than forcing staff to recreate data.

Practical support is available - follow LNDS' AEV and LNDS pilot-to-production case study: building a full data inventory at the Environment Agency, use LNDS' LNDS Data Cataloguing service for metadata models and training, and plan deployment to the govCloud or a private Cloud under the national cloud strategy to keep processing sovereign and secure (govCloud guidance for Luxembourg national cloud strategy); the payoff is concrete: faster access, fewer duplicates and a searchable “library” of public data ready for trustworthy AI pilots.

Funding and partnerships are already practical levers for public‑sector AI in Luxembourg: Luxinnovation acts as a hands‑on national contact point - helping teams find EU and national grants, prepare stronger proposals and connect with partners for programmes such as Horizon Europe, the Digital Europe Programme and the Innovation Fund (Luxinnovation Find Funding guidance for EU and national grants); the Luxembourg National Research Fund (FNR) supplies person, project and programme grants (CORE, INTER, NCER and more) that de‑risk R&D and public‑private research collaborations (Luxembourg National Research Fund (FNR) funding programmes); and a recent €300M startup scheme backed by ministers offers generous support for scaling ventures - up to 80% public co‑financing (capped at €200,000) with a required minimum 20% private investment - creating a concrete route for SMEs and agencies to co‑fund pilots and access MeluXina‑class HPC and other national services (€300M Luxembourg startup financing scheme and 10-point plan).

Together these instruments, plus joint calls (HPC, health tech, defence) and cluster support, make it realistic for government teams to stitch grant funding, partner expertise and secure compute into production‑grade AI pilots.

Here's a short, practical wrap: Luxembourg's 2025 playbook means public teams should move from ambition to action by following a tight checklist - identify a high‑value, low‑risk pilot and submit it to the single annual Tech‑in‑GOV call so ministries can get funding and expert guidance (Tech‑in‑GOV call for projects); ensure datasets are catalogued and FAIR-ready and tap LNDS' Data Factory + AI Factory services for secure data products and MeluXina‑class compute (LNDS Data and AI Factories services); lock in compliance and oversight early (CNPD is the designated competent authority under national AI Act plans) and design documentation, risk classification and ethics review into procurement; run a rapid sandboxed experiment with measurable KPIs, then scale via the AI Factory or traditional procurement if outcomes show value; and invest in people - short, practical courses (for example AI Essentials for Work bootcamp - Nucamp registration) speed up prompt literacy and operational adoption.

Taken together, these steps turn national strategy into operational pilots that are legal, sovereign and useful for citizens.

“This vision is based on three new strategies: on data, artificial intelligence and quantum technology. Together, they form a coherent and unique vision that is unrivalled in the world.”