Deutsche Telekom and Schwarz Group Seek EU Funding for German AI Data Center Project
November 30, 2025
In a significant move to bolster Europe's artificial intelligence capabilities, Deutsche Telekom and Schwarz Group, the retail giant behind the Lidl and Kaufland chains, are reportedly in advanced talks to jointly build a major AI data center in Germany. The project underscores the intensifying race within the European Union to develop sovereign, large-scale computing infrastructure capable of training next-generation AI models and reducing reliance on non-EU tech giants.
According to a report by German business newspaper Handelsblatt, the two corporate powerhouses are preparing an application for funding from the European Union's €20 billion ($23.2 billion) AI gigafactories initiative. This fund, announced in February 2025 as part of the broader €200 billion InvestAI program, is designed to finance the construction of four massive AI data centers across the bloc. Each facility is envisioned to deploy approximately 100,000 of the latest-generation AI chips to train large language models and other advanced AI systems.
The initiative has also reportedly attracted backing from Canadian alternative investment firm Brookfield, though both Schwarz Group and Brookfield declined to comment on the report. A Deutsche Telekom spokesperson, while not confirming the joint venture, told Handelsblatt that the company is "interested in establishing the EU AI Gigafactory in a leading position for Germany." This potential collaboration follows earlier reports that Deutsche Telekom, Schwarz, enterprise software provider SAP, and web host Ionos were negotiating a joint EU-backed application for a similar AI data center project.
For Deutsche Telekom, one of the world's largest telecommunications companies by revenue, the project represents a strategic expansion of its growing AI infrastructure portfolio. The company has been actively capitalizing on the surge in demand for AI compute, announcing just last month a partnership with Nvidia to establish a data center in Munich for an "industrial AI cloud" offering. Schwarz Group, Europe's largest retailer, is making a parallel push into digital infrastructure through its IT division Schwarz Digital and its cloud and AI unit, StackIT. The group recently broke ground on a separate 200-megawatt data center in Lübbenau, Germany.
The potential joint venture signals a powerful convergence of telecoms expertise, retail-scale digital demand, and institutional capital aimed at securing a pivotal role for Germany—and Europe—in the global AI landscape. If successful, the project would mark a critical step in the EU's ambition to create a competitive, homegrown AI ecosystem.
Source: datacenterdynamics
Deutsche Telekom and Schwarz Group Seek EU Funding for German AI Data Center Project
