Nvidia, Deutsche Telekom to Build AI Factory in Europe Under $1.15 Billion Partnership -- Update

By Aimee Look and Mauro Orru

Nvidia and Deutsche Telekom plan to build one of Europe's largest artificial-intelligence factories under a 1 billion-euro ($1.15 billion) partnership, a boost for the European Union as it seeks to expand its AI capabilities to catch up with the U.S.

The companies said they would renovate an existing data center in Munich, Germany, and power it with up to 10,000 Nvidia Blackwell graphics processing units. Expected to launch operations in the first quarter of next year, Deutsche Telekom said the facility would bolster AI computing power in Germany by around 50%.

Deutsche Telekom said several partners like Perplexity had already expressed their interest and willingness to harness the AI factory's computing power. Dozens of miles of fiber optic cable will be laid to connect the GPUs.

"We're bringing Nvidia AI and robotics to start a new era of Germany's industrial transformation," Nvidia Chief Executive Jensen Huang said.

While the expansion is taking place independently of EU efforts to launch AI gigafactories--facilities that will be equipped with roughly 100,000 of the latest AI chips--the project is a boost for the bloc as it seeks to add computing power in a bid to catch up with the U.S. in the AI race.

OpenAI's release of ChatGPT to the public in late 2022 ushered in a spending bonanza from companies eager to bolster their AI offering and satisfy growing demand for data centers. However, AI investments in Europe have been tiny compared to the hundreds of billions of dollars committed in the U.S.

Earlier this year, Washington announced the Stargate AI venture to build data centers in the U.S. for OpenAI. The ChatGPT maker, SoftBank Group, Oracle and UAE firm MGX are the equity funders in Stargate, for which they had committed $100 billion initially.

Major tech companies have announced a patchwork of AI alliances in recent weeks. Nvidia and Intel agreed to jointly develop data-center and personal-computing products, while the ChatGPT maker struck a multibillion-dollar deal with Advanced Micro Devices to collaborate on AI data centers.

OpenAI also signed a contract with Oracle to purchase $300 billion in computing power over roughly five years, The Wall Street Journal reported in September.

The EU, for its part, pledged to mobilize 200 billion euros in AI investments. More than 20 investors earmarked 150 billion euros for AI-related opportunities in Europe over the next five years, while the bloc set up a new 20 billion-euro fund for up to five AI gigafactories.

News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI.

Write to Aimee Look at [e-mail] and Mauro Orru at [e-mail]

(END) Dow Jones Newswires

11-04-25 1033ET