German consortium in talks to build AI data centre, Telekom says

FRANKFURT (Reuters) -Deutsche Telekom has teamed up with SAP, web hosting firm Ionos and unlisted retailer Schwarz to seek European Union support to build a data processing centre for artificial intelligence in Germany, it said on Tuesday.

The European Commission this year unveiled plans to provide $20 billion in funding to construct AI data centres to catch up with the U.S. and China.

Newspaper Handelsblatt reported on Tuesday that the consortium is in talks to build one of the five centres, known as AI gigafactories, the EU plans to 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, told Reuters, adding that the company is seeking a leading role.

"Rarely before have the signs and the common will in Europe been as strong as they are today."

The EU project, intended to enable the bloc to create its own AI models, will face challenges ranging from obtaining chips to finding suitable sites and electricity.

Under a government coalition agreement struck earlier this year, German Chancellor Friedrich Merz's conservatives and the Social Democrats said they aimed to have at least one of the centres built in Germany.

Handelsblatt said the deadline to provide initial expressions of interest to the EU is June 20.

Ionos told Reuters it is holding talks about a German AI gigafactory 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, adding that several questions remain.

SAP and Schwarz did not immediately respond to a request for comment.

(Reporting by Ludwig Burger, editing by Friederike Heine, Thomas Seythal and Jan Harvey)