Telekom and parent company of Lidl to build German AI data factory

Deutsche Telekom and Schwarz Group, the parent company of the Lidl supermarket chain, want to join forces and build a large artificial intelligence (AI) data centre in Germany.

The Handelsblatt newspaper reported on Monday that the two companies are in talks about an "AI factory" in order to apply for EU funding.

A Canadian investor could come on board as a financier, with Handelsblatt reporting that negotiations are already at an advanced stage.

A Telekom spokesman said that the company was fundamentally interested in "gigafactories." However, he did not want to comment on the specific case, and a Schwarz spokesman also declined to comment.

In the digital age, data requirements are increasing massively, and AI applications are driving an enormous hunger for data, including for the training of their language models. This requires new data centres to be built in Germany or other EU countries, making Europe less dependent on the US.

Telekom and the Schwarz Group have already stepped up their efforts in the field of AI data centres, and the joint project is now intended to increase the pace.

At the beginning of November, Telekom announced in Berlin that it would be entering the construction and operation of AI data centres on a large scale.

In mid-November, the Schwarz Group began the construction of a data centre in eastern Germany with an investment volume of €11 billion ($13 billion) over the next five to 15 years.