Lidl Owner to Build an "AI Gigafactory"? Billions of Euros at Play

According to Bloomberg, German Digital Minister Karsten Wildberger will meet with companies like the Schwarz Group, Deutsche Telekom and SAP on Friday to discuss the issue of "digital sovereignty."

Merz's administration wants to increase Europe's technological sovereignty

Friedrich Merz's government wants to "reduce technological dependence in Germany and Europe and significantly expand our expertise in key technologies such as artificial intelligence, cloud computing, semiconductors and cybersecurity."

Europe is rushing to invest in artificial intelligence infrastructure as lawmakers and companies worry the continent is lagging behind in key technologies and too reliant on American suppliers.

Massive investments in AI in the United States have inspired the European Commission

In January, OpenAI launched Project Stargate, pledging to spend as much as $500 billion on AI in the U.S. Three months later, the European Commission announced it would fund up to five AI "gigafactories" —massive data warehouses, each equipped with around 100,000 advanced chips designed to develop AI models.

The funding is expected to spur private investment that could ultimately triple the capacity of European data centers within 5-7 years.

The Schwarz Group wants to lead the German initiative

Several German companies have sent letters of intent to the European Commission detailing their approach to building the new facilities, according to people familiar with the plans. The Schwarz Group now wants to lead the joint German tender and hopes to convince other companies to join the project.

This may not be so easy. Earlier this year, the Schwarz Group considered partnering with a consortium consisting of Siemens, SAP, and Deutsche Telekom. However, those talks fell through. SAP CEO Christian Klein, who initially supported a European alternative to Stargate, said in early July that Europe should change its investment strategy .

A Deutsche Telekom spokesperson wrote in an email to Bloomberg this week that the company "is ready to play a leading role in Germany's AI gigafactory initiative." However, the representative did not comment on any partnerships or funding strategies.

In June, the telecommunications operator announced the opening of a cloud computing center in 2026 that will house 10,000 Nvidia chips. This represents one-tenth of the chips that each proposed gigafactory will have, according to the European Union.

The owner of Lidl is just starting out in the technology field

The Schwarz Group is a relatively new player in the technology market. It began building its own cloud computing service, StackIt, in 2017. The German company said that the limited guarantees of US cloud providers regarding data privacy and security were a driving force behind its strategy.

"Nobody could tell us where the data was stored," Rolf Schumann, co-president of Schwarz Digits, the company's IT division, said in an interview in May. "So we said, 'We need our own cloud.'"

Moreover, the Schwarz Group planned to invest €11 billion in its cloud business over the next three to five years. It's worth noting that Amazon, a leading cloud services provider, has spent $78 billion on investments in 2024 alone.