Deutsche Telekom rumoured to build AI gigafactory with Schwarz Group

Deutsche Telekom and Schwarz Group are reportedly in talks to apply for EU funding to build large AI-focused data centres in Germany, according to German daily Handelsblatt. The companies are said to be negotiating over hosting part of the European Commission’s planned “AI Gigafactory” initiative, which will distribute around US$20 billion to expand AI data centre capacity across the EU. No agreement has been reached yet, but a Deutsche Telekom spokesperson told Handelsblatt the firm is interested in securing a leading role for Germany.

Deutsche Telekom has stepped up its data centre push since 2023, targeting rising demand for AI infrastructure. In October, it partnered with Nvidia on a €1 billion (US$1.16 billion) data centre project in Munich, described as Europe’s first industrial AI cloud, designed to let German firms train and refine AI models with their own data. The company says this build-out could lift Germany’s AI computing power by about 50%. CEO Tim Höttges has framed AI as a way to shore up Germany’s industrial base, arguing that fast deployment of local AI capacity is critical for maintaining the country’s strengths in engineering and manufacturing.