Published December 3, 2025 · Updated December 3, 2025
Deutsche Telekom and Schwarz Group are preparing to build one of Europe’s largest AI-focused data centres, aiming to strengthen the continent’s digital sovereignty and reduce reliance on U.S. and Asian cloud infrastructure. The project could become a foundational pillar for Europe’s growing AI ecosystem, supporting enterprises, governments and AI developers across the region.
Key Takeaways
- Deutsche Telekom and Schwarz Group plan a large European AI data-centre, described as an “AI gigafactory.”
- Project aims to boost European AI infrastructure and digital sovereignty.
- German government expected to support the initiative; potential EU-level backing likely.
- Data centre may provide advanced compute for AI training, inference and enterprise cloud.
- Strengthens Europe’s ability to host sensitive data within EU borders.
- Increases competition with U.S. hyperscalers such as Amazon, Google and Microsoft.
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Recent developments around the European AI gigafactory
According to reporting cited by Reuters, Deutsche Telekom and Schwarz Group — owner of the massive cloud provider STACKIT — are working on plans to build a new AI-focused data centre in Germany.
The project, still in early stages, is expected to benefit from favourable government positioning as Germany seeks to advance sovereign cloud and AI capabilities.
Both companies are already strong players in European cloud infrastructure:
- Schwarz Group (STACKIT) operates large-scale data centres used by thousands of organisations across Europe.
- Deutsche Telekom (T-Systems) provides cloud, enterprise AI and cybersecurity services for major public institutions and industry.
The new data centre would combine their strengths to deliver compute capacity optimised for AI workloads — particularly training and inference of modern LLMs, multimodal models and enterprise-grade AI services.
If realised, it could become one of Europe’s most significant AI infrastructure investments to date.
Strategic context & industry impact
Europe has long been dependent on U.S. cloud giants for large-scale compute.
While Europe leads in regulation and ethical frameworks, it lags behind in foundational AI infrastructure — a gap that the new project aims to close.
Key strategic implications:
- Digital sovereignty: Ensures sensitive AI workloads remain in the EU.
- Competition: Challenges dominance of U.S. cloud hyperscalers.
- Accelerated AI adoption: More accessible AI compute for European startups, research institutions and enterprises.
- Reduced geopolitical risk: Mitigates reliance on foreign infrastructure during global tensions.
- Boost to EU innovation: Positions Europe to increase participation in the global AI race.
For enterprises, the ability to host LLMs, AI agents and advanced analytics within EU borders — under GDPR-compliant conditions — will become a major selling point.
Technical details
While full technical specifications have not been disclosed, the project is expected to focus on:
- High-performance compute clusters optimised for AI training and inference
- Energy-efficient cooling and power systems aligned with EU sustainability rules
- GPU and AI accelerator racks supporting next-generation LLMs and multimodal workloads
- Secure cloud infrastructure for government, industrial and healthcare clients
- Hybrid-cloud compatibility with existing European cloud services (STACKIT, Open Telekom Cloud)
Given the scale, the facility may rival U.S. hyperscaler regions in Europe — a major first for European-owned infrastructure.
Practical implications for users & companies
For developers and startups
- Greater availability of European-located GPU/TPU compute
- Lower latency AI applications for EU users
- More GDPR-compliant AI deployment options
- Potentially lower costs compared to U.S. hyperscaler AI compute
For enterprises
- Ability to host sensitive data and AI models fully within EU borders
- Stronger compliance alignment with EU regulations (GDPR, AI Act)
- Reduced vendor lock-in
- More resilience in geopolitical supply chains
For the broader AI ecosystem
- Strengthens Europe’s position in the global AI race
- Enables more European research groups to train advanced models
- Increases AI innovation capacity across EU member states
What happens next
The initiative is expected to progress in early 2026 as both companies align their strategies, secure government support and develop the technical blueprint for the site.
If the European AI gigafactory moves ahead, it could become a milestone in Europe’s shift toward AI sovereignty — reshaping how cloud, compute and AI services are delivered across the continent.
For more insights on AI infrastructure, European cloud strategies and global AI competition, explore guides in the AI Guides Hub, follow breaking updates in the AI News Hub, and review investment implications in the AI Investing Hub.
Sources
Reuters — Deutsche Telekom and Schwarz Group plan major AI data centre in Germany
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For deeper insights into AI hardware, LLMs, and on-device AI trends, explore the AI Guides Hub for technical breakdowns, the AI Tools Hub for hands-on comparisons, the AI News Hub for rapid updates, and the AI Investing Hub for market-facing analysis on companies developing next-generation AI infrastructure.
