Telekom and Lidl Parent Plan Europe’s First AI Gigafactory

Germany is preparing one of Europe’s most ambitious tech projects: Deutsche Telekom and the Schwarz Group — parent company of Lidl and Kaufland — are joining forces to build a European AI Gigafactory. The idea: a next-generation hyperscale computing hub that provides local, sovereign AI infrastructure instead of relying on Amazon, Google or Microsoft.

The alliance carries serious weight: The Telekom contributes its fiber networks, cloud platforms and existing data centers. The Schwarz Group brings its STACKIT cloud division and deep investment capacity. Additional investors are already in discussion, and the project could attract billions in EU funding.

The motivation is clear. Europe is lagging behind in training large AI models due to a lack of compute capacity. While U.S. hyperscalers dominate the global market, European companies often have to run sensitive AI workloads abroad. The planned Gigafactory aims to change that by creating AI infrastructure built in Europe, operated in Europe, and protected under EU standards.

If realized, the project could become a turning point — technologically, economically and geopolitically. An AI Gigafactory is not just another data center. It enables:

·       Training of large-scale language models on European hardware

·       AI services for SMEs and industry

·       Cloud sovereignty for critical sectors

·       A level playing field for European startups, which often lack access to high-performance computing

More broadly, it signals something Europe has long struggled with: the willingness to coordinate, pool resources and build globally competitive infrastructure at scale.

Nothing is fully finalized yet, but the direction is unmistakable:
Europe no longer wants to stand on the sidelines while AI ecosystems are built elsewhere.

Developing AI products in Europe may soon no longer require renting compute thousands of miles away — but tapping into a sovereign infrastructure right at home.

SK