Deutsche Telekom and Nvidia to build Europe’s first industrial AI cloud by 2026

Deutsche Telekom, Germany‘s largest telecommunications company, and Nvidia have announced plans to build what they describe as the world’s first industrial AI cloud infrastructure specifically designed for European manufacturers. The ambitious project, expected to launch by 2026, represents a significant step in Europe’s effort to establish technological independence in artificial intelligence while addressing growing concerns about data sovereignty.

The partnership aims to create what Nvidia founder Jensen Huang calls a “second factory” for manufacturers—one dedicated to generating the artificial intelligence that powers modern industrial operations. This concept reflects a fundamental shift in manufacturing, where companies increasingly rely on AI-driven simulations and predictive analytics alongside traditional production lines.

Massive computing power for industrial applications

The planned facility will house 10,000 graphics processing units (GPUs)—specialized computer chips designed to handle the parallel processing demands of artificial intelligence. To put this in perspective, a typical high-end gaming computer might contain one or two GPUs, while major AI research projects often require hundreds. The scale of this installation positions it among the most powerful AI computing facilities in Europe.

These GPUs will be integrated into Nvidia’s DGX B200 systems and RTX Pro Servers, enterprise-grade computing platforms designed specifically for AI workloads. The infrastructure will support what’s known as “simulation-first manufacturing”—a process where companies create detailed digital twins of their production systems to test scenarios, optimize processes, and predict maintenance needs before implementing changes in the physical world.

For European manufacturers, this could mean the ability to simulate complex production scenarios, optimize supply chains in real-time, and develop predictive maintenance systems that prevent costly equipment failures. Industries ranging from automotive manufacturing to pharmaceuticals could leverage this infrastructure to accelerate product development and improve operational efficiency.

Data sovereignty as competitive advantage

Deutsche Telekom emphasized that the project will ensure all data processing complies with European data protection regulations, including the General Data Protection Regulation (GDPR). This focus on data sovereignty—the concept that data should be subject to the laws and governance structures of the nation or region where it’s collected—has become increasingly important as AI systems require vast amounts of sensitive operational data.

“Europe’s technological future needs a sprint, not a stroll,” said Timotheus Höttges, Deutsche Telekom’s CEO. “We must seize the opportunities of artificial intelligence now, revolutionize our industry and secure a leading position in the global technology competition.”

This emphasis on keeping European industrial data within European borders addresses growing concerns about technological dependence on non-European cloud providers. Many European manufacturers have been hesitant to fully embrace cloud-based AI solutions due to concerns about where their proprietary data might be stored and processed.

Europe’s broader AI infrastructure push

The Deutsche Telekom-Nvidia partnership aligns with a larger European initiative to establish the continent as a major player in AI development. Last month, European Commission President Ursula von der Leyen launched InvestAI, a €20 billion initiative designed to transform Europe into a leading hub for AI innovation.

Central to this effort is the creation of four large-scale AI “gigafactories” across the European Union. These facilities will each house approximately 100,000 next-generation AI chips—making them roughly ten times larger than the Deutsche Telekom facility. The European Commission describes these gigafactories as a “CERN for AI,” referencing the famous particle physics laboratory that pioneered international scientific collaboration.

Unlike private sector initiatives, these gigafactories will operate as public-private partnerships, providing access to researchers, companies, and governments. The goal is to democratize AI development beyond major technology companies, giving startups and research institutions access to world-class computing resources.

Meanwhile, Nvidia has separately announced partnerships with governments and technology providers across France, Italy, Spain, the United Kingdom, and Nordic countries. These projects collectively promise to deliver more than 3,000 exaflops of computing capacity—a measure of computational power that represents the ability to perform three quintillion calculations per second.

Strategic implications for European competitiveness

The timing of these announcements reflects growing recognition that AI infrastructure has become a critical component of national and regional competitiveness. Just as previous generations of policymakers focused on building highways and telecommunications networks, today’s leaders increasingly view AI computing capacity as essential economic infrastructure.

For European manufacturers, access to sovereign AI infrastructure could provide significant competitive advantages. Companies could develop proprietary AI models using sensitive operational data without concerns about intellectual property exposure. They could also ensure compliance with European regulations while accessing cutting-edge AI capabilities.

The industrial focus of the Deutsche Telekom-Nvidia facility also addresses a specific European strength. While American and Chinese companies have dominated consumer AI applications, Europe maintains significant advantages in industrial automation, precision manufacturing, and engineering expertise.

However, the 2026 timeline for the Deutsche Telekom facility highlights the urgency European leaders feel about AI competition. By that time, American and Chinese AI infrastructure will have continued expanding, potentially making it more difficult for European initiatives to achieve technological parity.

The success of these projects will likely depend on their ability to attract major European manufacturers as anchor customers and demonstrate clear return on investment for AI-driven industrial applications. As the race for AI supremacy intensifies globally, Europe’s bet on industrial AI infrastructure represents a strategic attempt to leverage existing manufacturing strengths while building technological sovereignty for the digital age.