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.

The company on Tuesday signed a €1 billion ($1.15 billion) partnership with Deutsche Telekom to create an “AI factory” in Munich that 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.

This partnership comes at a time when the European technology industry is calling on EU lawmakers to reduce their dependence on foreign infrastructure and service providers, and to promote the adoption of local alternatives. Meanwhile, technology companies have criticized the bloc’s approach to regulating AI, arguing that rules only stifle innovation.

The European Union earlier this year allocated €200 billion 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.”