nvidia, deutsche telekom strike €1b partnership for a data center in munich

Nvidia Invests in German AI Infrastructure

Nvidia is strategically deploying its financial resources to capitalize on its leading position within the rapidly expanding artificial intelligence landscape.

A significant agreement was announced on Tuesday, involving a €1 billion (approximately $1.15 billion) partnership between Nvidia and Deutsche Telekom. This collaboration aims to establish an “AI factory” located in Munich.

Boosting Germany’s AI Capabilities

The primary objective of this initiative is to enhance Germany’s AI computing capacity by 50%.

Dubbed the “Industrial AI Cloud,” the project will leverage a substantial infrastructure consisting of over 1,000 Nvidia DGX B200 systems and RTX Pro Servers. These servers will be equipped with up to 10,000 Blackwell GPUs.

This powerful combination will deliver AI inferencing and related services to businesses throughout Germany, all while adhering to the nation’s stringent data sovereignty regulations.

Early Partnerships and Use Cases

Deutsche Telekom has already identified initial partners for this venture. These include Agile Robots, whose robotic systems will be utilized for server rack installation at the facility.

Perplexity is also on board, intending to utilize the data center to provide localized AI inferencing services to German users and companies.

Furthermore, the telco highlighted the potential for applications such as digital twins and physics-based simulations within industrial settings.

Infrastructure and Technology Partners

Deutsche Telekom will be responsible for providing the essential physical infrastructure required for the project.

SAP will contribute its business technology platform and a suite of applications to support the initiative.

European Tech Industry Context

This partnership arrives amidst growing calls within the European technology sector for reduced dependence on non-European infrastructure and service providers.

There is a strong push to encourage the adoption of locally developed alternatives.

Simultaneously, concerns have been raised by tech companies regarding the EU’s regulatory approach to AI, with arguments that the rules may stifle innovation.

EU Investment in AI

Earlier this year, the EU committed €200 billion to the creation of “AI gigafactories” across the continent.

These facilities will focus on “industrial and mission-critical applications.”

However, funding levels for AI initiatives within the European Union remain considerably lower compared to the United States, where companies like Nvidia, Microsoft, Google, and Oracle have invested hundreds of billions in data centers and infrastructure.

Project Timeline and Vision

Deutsche Telekom clarified that this project is independent of the EU’s AI gigafactory initiative and is anticipated to begin operations in early 2026.

“Mechanical engineering and industry have made this country strong,” stated Tim Höttges, CEO of Deutsche Telekom. “But here, too, we are challenged. AI is a huge opportunity. It will help to improve our products and strengthen our European strengths.”