Germany wants to become leader in data centers for AI in Europe

Announcement of Google’s billion-dollar investment in the country’s data economy excites the government. But experts warn of technological dependence, risk to digital sovereignty and climate impact.

Google announced on Tuesday (11/11) that it will invest 5.5 billion euros (R$28.9 billion) in Germany over the next four years. The funding will be used to build a new data processing center near Frankfurt and expand three existing ones in the same city, in Munich and Berlin.

German officials hailed the news as a boost to the country’s digital ambitions. Data processing centers (data centers, in English) are used for large technology companies, big techs, to maintain artificial intelligence (AI) tools.

“We want to make Germany the leader in data processing centers in Europe,” the minister responsible for digitalization, Karsten Wildberger, told Reuters. The Minister of Research and Technology, Dorothee Bär, stated that the decision would bring “growth and added value” to the country.

The announcement also excited Finance Minister Lars Klingbeil, who described the plans as a “genuine investment in the future” and part of a carbon-neutral transformation. Google expects to generate nine thousand jobs per year in Germany by 2029.

Experts urge caution

But experts also talk about negative points. Katharina Hölzle, director of the Fraunhofer Institute in Stuttgart, warns of new forms of dependence on external capital.

“We are building infrastructure that will make it even more difficult for us to disengage in the future,” he argues in an interview with DW. Concern about Germany’s digital sovereignty has been growing in the niche, including because of large-scale data storage.

For Wolfgang Eppler, a researcher at the Institute for Technology Assessment and Systems Analysis (ITAS, its acronym in German), in Karlsruhe, the announced value is low compared to spending in the USA. “Compared to what the United States is investing – for example, 500 billion dollars (R$2.6 trillion) –, it is a drop in the ocean.”

The gap between Europe and the United States (US) is growing, where technology companies like Microsoft, Google and startups like OpenAI are investing hundreds of billions of dollars in expanding AI computing capacity.

According to the Bloomberg news agency, the Google project in Germany should use up to 10,000 graphics processing units (GPUs). A single data center in Texas, backed by SoftBank, OpenAI and Oracle, has 500,000 GPUs planned.

Bet on the data economy

Google is not alone in betting on Germany’s data economy. Just last week, German telecommunications operator Deutsche Telekom and American AI chip maker Nvidia announced a joint €1 billion (R$5.3 billion) data processing center project.

According to industry association Bitkom, total investment in data processing centers in Germany is expected to reach 12 billion euros (R$63.2 billion) this year.

In September, French company Data4 announced plans to invest around 2 billion euros (R$10.6 billion) and laid the foundation stone for its first German unit in Hanau. Meanwhile, the Innovation Park for Artificial Intelligence (IPAI) in Heilbronn, a city north of Stuttgart, is set to become Europe’s largest AI ecosystem, focusing on chip design.

The European Union (EU) is also trying to close the technology gap. In February, the bloc unveiled a 200 billion euro (R$1 trillion) plan to promote the development of AI and triple the region’s capacity for these systems by 2032.

Deutsche Telekom is reportedly in talks with several companies about building so-called AI gigafactories, although progress has been slow and the EU has not yet detailed how it will evaluate the projects or allocate resources.

A recent study by Bitkom also pointed out that Germany’s total server capacity is expected to almost double, reaching 5 gigawatts by 2030.

Unlikely neutrality

A completely carbon-neutral data processing center – as preached by the Finance Minister – is still a challenge, says Hölzle, from Fraunhofer, who remains cautiously optimistic.

“I don’t know if we’ll get to zero emissions,” she said. “But we should think about how, if we’re not building our own data centers, we can at least develop the technologies that will be used in them – I definitely see opportunities for us in that field.”

Google says its new facilities in Germany will be built with a focus on sustainability.

The company plans to capture and reuse waste heat from its data processing center near Frankfurt, routing it to the district heating network of regional utility EVO. Once in operation, the system could provide hot water and heating to more than 2,000 nearby homes.

Risk to Europe’s digital sovereignty?

Both Hölzle and Eppler advise German politicians to remain vigilant.

“We must not become too dependent [das big techs americanas]”, warns Eppler, stressing that, in the case of Google, it is an American company that will store and process data generated in Germany.

Hölzle says what comforts her is that “the discussion about digital sovereignty has increased over the last 12 months.” Still, she stresses that it is “very important that German policy pays close attention to where this data is stored and who has access to it.” “This is a fundamental issue to protect the competitiveness of German industry”, he points out.

Originally published by DW on 11/15/2025

By Dirk Kaufmann