Nvidia is playing fast and loose with its war chest as it seeks to further its momentum as a major backer of the AI boom.
The company on Tuesday signed a 1 billion euro ($1.15 billion) partnership with Deutsche Telekom to establish an “AI factory” in Munich aimed at increasing Germany’s AI computing capacity by 50%.
The project, called “Industrial AI Cloud,” will use more than 1,000 Nvidia DGX B200 systems and RTX Pro servers with up to 10,000 Blackwell GPUs to provide AI inference and other services to German companies while complying with German data sovereignty laws.
Deutsche Telekom said initial partners in the project include Agile Robots, whose bots will be used to install server racks at the facility, and Perplexity, which will use its data center to provide “in-country” AI inference to users and businesses in Germany. The telco also outlined digital twins and physically-based simulation as use cases for industrial enterprises.
The telco said it will provide the physical infrastructure for the project, while SAP will provide the business technology platform and applications.
The partnership comes as Europe’s technology industry urges EU lawmakers to reduce dependence on foreign infrastructure and service providers and encourage the adoption of homegrown alternatives. At the same time, tech companies have criticized the EU’s approach to AI regulation, arguing that rules will only stifle innovation.
Earlier this year, the EU pledged €200 billion to establish an “AI Gigafactory” on the continent, focused on “industrial and mission-critical applications”. However, funding for AI initiatives in the European Union is significantly lower than in the United States, where companies such as Nvidia, Microsoft, Google, and Oracle are pouring hundreds of billions of dollars into building large data centers and various infrastructures to support the development of AI models and services.
Deutsche Telekom noted that the project is scheduled to start operating in early 2026 and is separate from the EU’s AI Gigafactory initiative.
“Mechanical engineering and industry have made this country strong,” says Tim Hetges, CEO of Deutsche Telekom. “But here too we face challenges. AI is a huge opportunity. It will help us improve our products and strengthen Europe’s strengths.”
