Deutsche Telekom Puts €250 Million Into Munich AI Factory Expansion

Deutsche Telekom is investing almost €250 million to expand its AI factory in Munich, a move it says will double the facility's computing capacity to 20 megawatts. The buildout adds Nvidia Blackwell Ultra B300 GPUs to the existing systems as the operator races to meet growing demand for AI compute in Germany and across Europe.

The expansion has a practical target audience: businesses that need horsepower to develop and run large AI models, carry out complex simulations and test new technologies. DT also points to so-called physical AI as a use case, letting companies test robots, products and production processes in virtual environments before deploying them in the real world.

What does the investment buy?

The Munich site is not a greenfield project. According to Federal Minister for Digital Affairs and State Modernisation Karsten Wildberger, the factory went from an idea to operations in just a few months and was fully booked after one year. That early saturation is the commercial case for doubling capacity now rather than later.

Economic Affairs and Energy Minister Katherina Reiche put a number on the scale of the expansion, saying the operator is "doubling its capacity to 20,000 graphics processing units." For Germany's industrial base, she argued, the value lies in pairing decades of process expertise with affordable, sovereign compute.

• Almost €250 million committed to the Munich AI factory expansion
• Capacity doubling to 20 megawatts of compute
• Additional Nvidia Blackwell Ultra B300 GPUs on top of existing systems
• Roughly 20,000 GPUs at the facility once the buildout completes, per Reiche

Sovereignty at the centre of the pitch

DT CEO Tim Höttges framed the investment in explicitly political terms. "Germany must not only be a user of AI; it must also create value and prosperity itself," he said. "Telekom has moved forward here at a rapid pace. Now we are taking the next step and expanding. So ideas become innovative products, and innovations become growth."

He extended the argument to Europe's standing in global AI development. "The world must take Europe seriously," Höttges said. "Powerful AI emerges from the interplay of computing capacity, secure data spaces, high-performance connectivity, and a sovereign, secure environment. Together with partners from industry, academia, and the public sector, Telekom brings these building blocks together into a European AI ecosystem."

The CEO also drew a line between technology and business results, separating the vendor-style vision from commercial metrics. "The goal is not only to develop AI, but to put it into practice as a scalable business model – delivering measurable efficiency gains, new products, and additional value creation in Germany and Europe," he said.

Government backing, with expectations attached

The expansion has drawn support from German government ministers and business leaders, who see AI as an opportunity for the country's industrial future. Wildberger was blunt about the pace DT has set. "Telekom thinks big and acts fast," he said. "This is exactly the mindset and pace we need to win the AI race for Germany and Europe. The federal government will do its part to help make further successes like this possible."

Reiche connected the Munich buildout to manufacturing's next chapter. "The next wave of artificial intelligence will fundamentally change the way we manufacture," she said. "When we combine this expertise with powerful AI, we create industrial intelligence." She called the investment "entrepreneurial courage that turns technological possibilities into industrial reality" and a major opportunity for Germany as a business location.

For Deutsche Telekom, the €250 million bet follows a pattern of European infrastructure moves, including a planned €1 billion acquisition of Polish fiber operators Fiberhost and Inea and a security partnership with Cloudflare. With demand already outstripping the Munich factory's first-year capacity, the doubled facility gives the operator room to grow — provided European enterprises keep filling it.