Only a few months after Schwarz Group attracted attention with an €11 billion data center project in Brandenburg, another major investment is already taking shape. Near Rostock, the company plans to invest up to €5.6 billion in cloud and AI infrastructure by 2033. Taken together, the projects amount to more than a series of spectacular construction plans. The owner of Lidl and Kaufland is systematically building a second line of business — and entering a market that has so far been dominated in Europe by US corporations.
The Next Major Project Is Planned Near Rostock
A data center with an initial grid connection capacity of 240 megawatts is planned for the Dummerstorf industrial area southeast of Rostock. Schwarz Group intends to invest up to €5.6 billion in the project by 2033.
The project is still at an early stage and remains subject to the necessary approvals. Even the precise configuration of cloud and AI chips has yet to be determined.
What is particularly striking, however, is the longer-term perspective. The site is designed to allow its connection capacity to expand to as much as one gigawatt by 2045. That would put Dummerstorf in an entirely different league. According to the state government, around 120 permanent jobs are expected to be created during the first expansion phase.
Schwarz cites the availability of onshore and offshore wind energy and the possibility of a direct connection to the 380-kilovolt extra-high-voltage grid as key advantages of the location. During regular operations, the facility is intended to run exclusively on electricity from renewable sources.
Northern Germany’s cooler climate should also make it easier to use outside air for cooling. A memorandum of understanding with Rostock’s municipal utilities is intended to pave the way for waste heat from the data center to be used in the city’s heating network.
On its own, the project would already rank among Germany’s largest data center developments. But Dummerstorf is not where Schwarz’s infrastructure push began.
€11 Billion Is Already Being Invested in Brandenburg
In Lübbenau, Schwarz Digits is currently building a data center with around 200 megawatts of grid connection capacity. The €11 billion investment is described by the company as the largest single investment in its history.
By the end of 2027, a facility capable of housing up to 100,000 graphics processing units is expected to be developed on the site of a former power plant. According to the company, the project will increase available computing capacity within Schwarz Group sevenfold.
Here, too, the focus is explicitly on cloud and AI applications rather than merely running Lidl’s cash register systems or Kaufland’s merchandise management software.
Together, Lübbenau and Dummerstorf represent planned investments of up to €16.6 billion across two major sites.
The projects are, however, at different stages of development. Construction is already under way in Lübbenau, while Dummerstorf remains an investment plan with substantial long-term expansion potential.
It is precisely the rapid succession of these announcements that reveals where Schwarz is heading.
STACKIT Began as an Internal Cloud
The development is unusual for a group that most consumers still associate primarily with Lidl and Kaufland.
STACKIT was initially established in 2018 to allow Schwarz companies to operate their data and IT systems within infrastructure they controlled themselves. Schwarz Digits has since begun selling its cloud services to external companies and public-sector institutions as well.
According to the provider, data is processed exclusively in data centers located in Germany and Austria, while the technological foundation relies heavily on open-source solutions.
STACKIT now operates seven data centers in Europe, with additional facilities under construction. Its stated ambition is to develop into a European hyperscaler.
This is more than a public-relations side project for a retail group. Schwarz Digits generated revenue of €2.2 billion in the 2025 financial year, an increase of 15.8 percent year on year. The group itself identifies rising demand for STACKIT as one of the main drivers of that growth.
For comparison, Schwarz Group as a whole generated revenue of €185.6 billion. The digital division therefore remains small relative to the overall group — but it is growing considerably faster than the retail business.
The Real Target Lies Beyond Lidl and Kaufland
The crucial development is that Schwarz is no longer building digital infrastructure solely for its own needs.
STACKIT is, for example, part of a €250 million framework agreement by GovTech Deutschland for cloud solutions in the public sector.
In Mecklenburg-Western Pomerania, the partnership goes even further. Digital building permits are expected to be implemented on the STACKIT platform as early as 2026, while the openDesk workplace suite is initially to be introduced for teachers. The cooperation is later intended to serve as a model for other German states.
At the same time, Schwarz Digits is expanding its offering beyond pure computing capacity. Its portfolio now includes cybersecurity, data and AI services, secure communications and workplace solutions. Partners include Aleph Alpha, SAP, CrowdStrike and Zscaler.
What is emerging step by step is a vertically integrated digital infrastructure business: from the physical data center and cloud services through to applications, artificial intelligence and cybersecurity.
The pattern is familiar from other parts of Schwarz Group.
The company has long produced some of its own food products, operates waste management and recycling businesses through PreZero, and is building its own transport capacities via Tailwind. The underlying logic is repeatedly the same: strategically important parts of the value chain should depend as little as possible on external providers.
Digital infrastructure is now being organized according to a similar principle.
Europe Has a Scale Problem in the Cloud
There is, however, a tangible economic reason why Schwarz is willing to spend billions.
European providers have so far benefited only to a limited extent from the enormous growth of the cloud market. According to Synergy Research Group, the European cloud infrastructure market reached around €61 billion in 2024.
Revenue generated by European providers has more than doubled since 2017, yet their market share fell over the same period from 29 percent to roughly 15 percent.
Amazon, Microsoft and Google, meanwhile, account for around 70 percent of the European market. Even Europe’s largest providers, SAP and Deutsche Telekom, each hold only about two percent according to Synergy data.
Part of that gap is explained by capital.
Cloud computing is a business in which data centers, networks and chips require enormous upfront investment before they generate corresponding revenue. Synergy estimated as early as 2025 that the major US providers were collectively investing roughly €10 billion per quarter in their European capacity alone.
For smaller providers, replicating that scale is extremely difficult.
The owner of Lidl and Kaufland, however, has something many European technology companies lack: a retail group with €185.6 billion in annual revenue behind it, capable of financing investments over very long periods.
€16.6 Billion Does Not Yet Make a European AWS
The scale of the announced investments should nevertheless not be confused with an already established market position.
Amazon Web Services, Microsoft Azure and Google Cloud operate global networks of data centers, software ecosystems built over decades and enormous customer bases.
STACKIT also remains a small provider compared with Europe’s largest competitors. Publicly available market-share data does not yet show STACKIT holding a significant share of the European cloud market.
Nor does digital sovereignty necessarily mean complete technological autonomy.
European data centers still rely on processors and graphics chips supplied predominantly by international manufacturers. Schwarz itself works with US technology companies in parts of its offering, including CrowdStrike, Zscaler and Google.
The main difference lies in who controls the infrastructure, where the data is processed and which legal jurisdiction applies to the provider.
That does not turn STACKIT into a European equivalent of AWS overnight.
But it does show that Schwarz is prepared to create the conditions required to compete at that scale at all.
The Supermarket Group Is Building a Second Foundation
Dummerstorf therefore changes the way the €11 billion investment in Lübbenau should be viewed.
A single data center could still have been interpreted as an exceptionally large investment in the group’s own digital transformation. A second site, another €5.6 billion and the prospect of eventually expanding to one gigawatt point to something different.
Schwarz is using the financial strength of its retail operations to enter a market in which that very financial strength is one of the most important barriers to entry.
Lidl and Kaufland remain the group’s economic foundation. But alongside supermarkets, manufacturing, recycling and logistics, another pillar is increasingly taking shape: digital infrastructure for companies and the public sector.
The more interesting question is therefore no longer why a grocery retailer is investing billions in data centers.
It is how much longer Schwarz Group can meaningfully be described as merely a retail company.
