Tech giant Nvidia and telecom leader Deutsche Telekom have signed a €1 billion ($1.15 billion) partnership to build an advanced AI data center in Munich, aimed at boosting Germany’s AI computing power by 50%. The project, called the “Industrial AI Cloud,” represents a major leap in Europe’s efforts to strengthen its technological independence and accelerate AI adoption across industries.
Under the agreement, Nvidia will supply more than 1,000 DGX B200 systems and RTX Pro Servers equipped with up to 10,000 Blackwell GPUs, providing immense computing capacity for AI training and inferencing. Deutsche Telekom will handle the physical infrastructure and network operations, while SAP will contribute its Business Technology Platform (BTP) and enterprise applications.
The Munich-based data center will comply with Germany’s strict data sovereignty laws, ensuring that sensitive corporate and consumer data remains within national borders a crucial step in Europe’s push for digital autonomy.
The Industrial AI Cloud
The new Industrial AI Cloud will serve as a platform for AI-driven industrial innovation. It will support use cases such as digital twins, physics-based simulations, and AI-powered analytics for sectors like automotive, manufacturing, and engineering industries central to Germany’s economy.
Early partners include Agile Robots, whose robotic systems will automate server rack installations, and Perplexity, which will use the center for “in-country” AI inferencing services for German businesses and users. These collaborations highlight the project’s goal of creating a fully integrated, AI-driven industrial ecosystem.
Strengthening Europe’s AI Ambitions
The partnership aligns with Europe’s broader mission to reduce reliance on foreign infrastructure and strengthen homegrown AI capabilities. While the European Union recently pledged €200 billion to develop AI gigafactories for mission-critical applications, overall investment in AI infrastructure still trails that of the U.S., where companies like Microsoft, Google, and Nvidia have spent hundreds of billions building massive AI data centers.
Deutsche Telekom CEO Tim Hottges emphasized that AI will play a transformative role in Europe’s industrial landscape. “AI is a huge opportunity. It will help improve our products and strengthen our European strengths,” he said.
Scheduled to begin operations in early 2026, the Munich AI factory stands as one of Germany’s most significant technology projects. By merging Nvidia’s cutting-edge GPU technology with Deutsche Telekom’s infrastructure and SAP’s enterprise expertise, the Industrial AI Cloud is poised to empower local industries, ensure data sovereignty, and position Germany at the forefront of Europe’s AI revolution.
