Nvidia, Deutsche Telekom to build €1bn German data centre

Nvidia Corp and Deutsche Telekom AG are building a €1bn ($1.2bn) data centre in Germany to bolster infrastructure in Europe that can power complex artificial intelligence systems.The facility is one of Europe’s largest and will begin operations in the first quarter of 2026, Germany’s biggest telecom operator said in a statement on Tuesday, confirming a report by Bloomberg News.The plans were unveiled at an event in Berlin featuring Nvidia Chief Executive Officer Jensen Huang and Deutsche Telekom boss Tim Höttges, as well as the heads of SAP SE, Deutsche Bank AG and two German government ministers. Their presence emphasised how Europe’s biggest economy is seeking to develop its own AI ecosystem to compete with rivals in the US and China."We’re bringing Nvidia AI and robotics to start a new era of Germany’s industrial transformation,” Huang said in the statement, calling the project one of Germany’s largest deployments of advanced AI chips.SAP, Europe’s biggest software company, will supply its business technology platform and applications for the data centre, which is being built in an existing facility in Munich. Deutsche Telekom said it will boost Germany’s AI computing power by around 50%.European business leaders have called on the continent to lean into its strengths in manufacturing rather than compete with the US and China on consumer-facing technology. The new initiative is building what Nvidia and its partners call an "industrial AI cloud,” which differs from the massive data centres being built in the US used to create large language models. The German site will host AI models and help connect them to industrial data sources, attempting to speed up industry’s adoption of the technology.The strategy comes after German attempts to create a national AI champion stumbled. Local startup Aleph Alpha initially positioned itself as a European alternative to OpenAI, but the company failed to keep up with the industry’s rapid pace of development and pivoted away from building large AI models.There’s "no sustainable prosperity without AI, no competitive advantage without AI,” German digital minister Karsten Wildberger said at the press conference. "AI could be Germany’s comeback.”However, the size of the investment also highlighted the gap between Europe and the US. Tech giants like Microsoft Corp and Alphabet Inc’s Google and startups like OpenAI are spending hundreds of billions of dollars to build AI computing capacity.The project in Germany will make use of as many as 10,000 advanced chips known as graphics processing units, according to the statement. That is just a fraction of size of major facilities planned in the US. A single data centre project in Texas being developed by SoftBank Group Corp, OpenAI and Oracle Corp will use about 500,000 GPUs.It is also smaller than some previously announced European data centre plans, including one anchored by OpenAI’s Stargate programme in Norway, a $10bn project backed by Brookfield Asset Management in Sweden, and a commitment by the United Arab Emirates to spend as much as €50bn to build a campus in France.The European Union announced a €200bn plan in February to support AI development in the bloc, with a goal of tripling the region’s capacity to power such systems within the next five to seven years.Deutsche Telekom has been involved in talks with other companies to participate in the push to build so-called AI gigafactories. But the process has been slow to get off the ground and the EU has yet to map out exactly how it’ll review bids and allocate funding. anchored