Nvidia and Deutsche Telekom sign a €1 billion partnership to establish a data center in Munich

Nvidia is playing fast and light with its war chest, as it looks to build on its momentum as a major beneficiary of the AI ​​boom.

Company on Tuesday I fell A €1 billion ($1.15 billion) partnership with Deutsche Telekom to create an “AI factory” in Munich aims to boost Germany’s AI computing power by 50%.

The project, called the “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 Telecom said early partners for the project include Agile Robots, whose robots will be used to install server racks at the facility, and Perplexity, which will use the data center to provide AI inferences “in-country” to German users and companies. The telco has also identified digital twins and physics-based simulation as use cases for industrial companies.

The telecom company said it will provide the physical infrastructure for the project, while SAP will provide its business technology platform and applications.

The partnership comes at a time when the European technology industry Appeal to EU legislators To reduce its dependence on foreign infrastructure and service providers, and promote the adoption of local alternatives. Meanwhile, technology companies Criticism of the bloc approach to regulating artificial intelligenceArguing that rules only hinder innovation.

European Union earlier this year It allocated 200 billion euros To create “AI mega-factories” on the continent, focusing on “industrial and mission-critical applications.” But funding for AI initiatives in the EU has been noticeably lower than in the United States, where companies like Nvidia, Microsoft, Google, and Oracle have poured hundreds of billions into building massive data centers and various infrastructure to support the development of AI models and services.

Deutsche Telekom noted that this project, which is expected to begin operations in early 2026, is separate from the European Union Artificial Intelligence Initiative.

“Mechanical engineering and industry have made this country strong,” says Tim Höttjes, CEO of Deutsche Telekom. “But here too, we face challenges. Artificial intelligence represents a huge opportunity. It will help improve our products and enhance our European strengths.”