Deutsche Telekom to Build AI Data Centre with SAP and Others
A consortium of German companies, including Deutsche Telekom, SAP and Ionos, are looking to develop an AI data centre with the European Commission’s AI gigafactories initiative.
First reported by Handelsblatt, Deutsche Telekom has partnered with SAP, web hosting company Ionos and Schwarz to seek support from the European Union (EU) to build a data centre specifically for AI in Germany.
This comes in the wake of the European Commission unveiling plans to offer €20bn ($20.9bn) in funding to build AI data centres in order for Europe to remain competitive with the US and China.
Handelsblatt reported on Tuesday that the consortium of companies are forming plans to build one of these five centres, also known as gigafactories, that the EU will support.
“The window of opportunity to create our own independent infrastructure for this is now,” Christine Knackfuss-Nicolic, Chief Technology Officer of Deutsche Telekom's T-Systems division, tells Reuters.
“Rarely before have the signs and the common will in Europe been as strong as they are today.”
What is the EU gigafactory project?
This project, devised by the EU, proposes three to five AI gigafactories across the EU at a cost of roughly €3-5 billion (US$3.39-5.66bn) each. The European Commission seeks to use public money to incentivise private investors, according to The Guardian, via a facility provided by the European Investment Bank.
AI gigafactories are envisioned to be high-capacity AI infrastructure hubs with significant amounts of compute power and automation capabilities. The European Commission has expressed hope that each gigafactory built would host around 100,000 AI chips that can be used to train next-generation AI models.
Germany is reportedly very interested in hosting one of these facilities, with Ionos telling Reuters that it is holding talks with several companies and the German government.
“In principle, we see the European Commission's initiative as an important step towards greater digital sovereignty, and are interested in participating in it,” the company said to Reuters.
The EU is proposing such a large-scale initiative because it feels it is falling behind the rest of the world in AI adoption. Already, the region risks falling behind with the technology – despite continued interest – on account of its infrastructure not being prepared to handle the increased power large AI models need in order to run.
In order to be successful, greater investment will be needed – which comes in the form of data centres.
How these companies could be planning to extend their data centre reach
Details about this project remain vague, but those companies mentioned by Handelsblatt already have a significant position in the data centre market.
Deutsche Telekom has a range of principles for data centre development, including to develop sustainable AI, which are intended to support green progress. It is already using AI within its data centres and networks to increase energy efficiency.
It currently has 16 data centres, but in October 2024 announced plans to expand with five additional locations.
Likewise, as a leading technology organisation, SAP currently operates at least 90 data centres around the world, including five in Germany. With its global network, the company is able to deliver reliable cloud services with minimal latency – while ensuring top performance for a range of businesses.
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