Nvidia has committed a significant investment in Europe, partnering with Deutsche Telekom in a €1 billion ($1.15 billion) deal to establish an advanced "AI factory" in Munich. This initiative aims to substantially boost Germany’s AI computing power by 50% and is named the “Industrial AI Cloud.” The project will leverage more than 1,000 Nvidia DGX B200 systems and RTX Pro Servers, incorporating up to 10,000 Blackwell GPUs, to deliver AI inferencing and other crucial services specifically for German companies, all while strictly adhering to German data sovereignty laws.

The collaborative endeavor has already attracted early partners. Agile Robots will utilize their robotic systems for the installation of server racks at the facility. Additionally, Perplexity is set to use this new data center to provide “in-country” AI inferencing capabilities to German users and businesses. Deutsche Telekom also outlined further applications for industrial companies, including digital twins and physics-based simulations, showcasing the broad utility of the new AI infrastructure. Deutsche Telekom will manage the physical infrastructure for the project, while SAP will contribute its business technology platform and applications.

This partnership emerges amidst a backdrop of increasing calls from the European tech industry for EU lawmakers to diminish reliance on foreign infrastructure and service providers, advocating for the adoption of homegrown alternatives. Concurrently, tech companies have voiced concerns regarding the bloc’s approach to AI regulation, arguing that current rules may impede innovation. While the EU earlier committed €200 billion to establish "AI gigafactories" on the continent, focusing on “industrial and mission-critical applications,” funding for AI initiatives within the European Union has generally lagged behind the U.S., where major tech players like Nvidia, Microsoft, Google, and Oracle have invested hundreds of billions in building vast data centers and supporting infrastructure.

Deutsche Telekom has clarified that its project with Nvidia, which is slated to commence operations in early 2026, is distinct from the EU’s broader AI gigafactory initiative. Tim Höttges, CEO of Deutsche Telekom, emphasized the importance of this step, stating, "Mechanical engineering and industry have made this country strong. But here, too, we are challenged. AI is a huge opportunity. It will help to improve our products and strengthen our European strengths." This partnership underscores a strategic move to reinforce Germany's industrial and technological capabilities in the rapidly evolving AI landscape.