The Firms Targeting EU AI Data Centre Funding: Explained
Demand for advanced digital infrastructure has become a central concern for policymakers and technology leaders in Europe.
The rapid proliferation of large-scale AI models – which require immense computational resources and specialised hardware – has highlighted a growing disparity between Europe and global leaders such as the US and China.
These regions have invested heavily in AI research, development and the construction of high-capacity data centres that underpin the training and deployment of cutting-edge AI systems.
European officials have voiced increasing concern that the continent risks falling further behind without targeted investment in next-generation data centres capable of supporting AI innovation at scale.
In response, the European Commission has announced a multi-billion euro initiative to fund the construction of so-called AI gigafactories – large, centralised data hubs equipped with the processing power and technical expertise necessary to support the region’s digital ambitions.
The move is seen as an attempt to secure Europe’s technological sovereignty and ensure that European companies, researchers and public institutions have access to the infrastructure needed to compete globally.
As a result, leading German technology firms are positioning themselves to bring one of these AI gigafactories to Germany.
Deutsche Telekom, SAP, Ionos and Schwarz Group have formed a consortium to bid for funding under the European Commission’s programme.
Deutsche Telekom and SAP leading German consortium in EU AI gigafactory bid
The company's collaboration is both about the urgency and the scale of the challenge, as Europe seeks to close the infrastructure gap and establish itself as a competitive force in the global AI market.
The companies are responding to the European Commission’s recent announcement of €20bn ($20.9bn) in funding for AI data centre development across the EU.
Christine Knackfuss-Nicolic, Chief Technology Officer of Deutsche Telekom’s T-Systems division, says: “The window of opportunity to create our own independent infrastructure for this is now.
“Rarely before have the signs and the common will in Europe been as strong as they are today.”
EU Gigafactory initiative and industry response
The European Commission has outlined plans to establish three to five AI gigafactories within the EU, with each facility requiring an investment of between €3-5bn (US$3.39-5.66bn).
The Commission intends to leverage public funds to attract private investment, using mechanisms such as the European Investment Bank to facilitate financing.
According to the plans, each gigafactory would serve as a high-capacity AI infrastructure hub, equipped with around 100,000 AI chips designed to train advanced AI models.
These facilities would support the development and deployment of next-generation AI technologies, addressing the computational demands that have increased with the rise of large language models and Gen AI applications.
Ionos, which operates data centres and provides cloud infrastructure services, confirms it is in discussions with other companies and the German government regarding the project.
The company states to Reuters: “In principle, we see the European Commission’s initiative as an important step towards greater digital sovereignty, and are interested in participating in it.”
Addressing Europe’s AI infrastructure gap
The European Commission has also expressed concern that the region is falling behind the US and China in terms of AI adoption and infrastructure readiness.
Therefore, the Commission’s initiative is intended to accelerate the development of the data centre market and ensure that European companies have access to the computing resources required for AI innovation.
The lack of sufficient infrastructure has been identified as a barrier to the deployment of large AI models, which require significant processing power and energy resources.
The consortium’s plans remain in the early stages, with specific details about the proposed German AI data centre yet to be disclosed. However, the companies involved have established track records in data centre operations.
Deutsche Telekom currently operates 16 data centres and announced plans in October 2024 to add five more locations – and the company is already employing AI within its data centres and network operations to improve energy efficiency.
Meanwhile SAP, which delivers enterprise software and cloud solutions, operates at least 90 data centres globally, including five in Germany. The company’s infrastructure supports cloud services for business clients, with a focus on minimising latency and maintaining service reliability.
Deutsche Telekom’s focus on sustainable AI infrastructure
Deutsche Telekom has further stated that its approach to data centre development includes principles aimed at supporting sustainable AI.
The company has already implemented measures to increase energy efficiency in its facilities, using AI-driven optimisation within its networks and data centres.
Christine underscores the urgency of the initiative: “The window of opportunity to create our own independent infrastructure for this is now.”
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