Volkswacht Bodensee - Google to open German centre for 'AI development'

Germany's ministry for digital affairs told AFP the centre will bring together cloud computing and data infrastructure, "AI development" operations as well as a space for cooperation between start-ups and research centres.

Europe is struggling to gain ground in the battle for AI dominance with the United States and China, which are pumping vast sums into the field and producing the most advanced models underpinning the technology.

The Google project is part of a 5.5 billion euro ($6.4 billion) investment drive into Europe's top economy announced by the US tech titan in November, planned to include a new data centre.

The firm said at the time it would renovate its Berlin office to add three floors equipped with meeting rooms, a new conference room and a demo space but made no mention of an AI centre in the capital.

Chancellor Friedrich Merz's coalition has signalled it wants to make progress in the area as part of efforts to revive the struggling economy, and there have been a flurry of announcements related to AI recently.

"I want technological leadership to once again become the core of our economic model," said Finance Minister Lars Klingbeil last month at the opening of an industrial AI hub, spearheaded by German telecoms giant Deutsche Telekom and US chip juggernaut Nvidia.

- 'Enormous challenges' -

But while efforts are being made to build up infrastructure and data storage capacities, the "challenges are enormous" for Germany, said Janis Hecker of the digital business association Bitkom.

The government still "underestimates the importance of these technologies for value creation, but also for sovereignty and the defence of our values", he said.

The United States builds more computing capacity each year than Germany has in total, the group says.

According to its calculations, one-thousandth of the proposed central government budget for 2026 is dedicated to AI, and only a fraction of a massive pot of funding to modernise the country's infrastructure is dedicated to cutting-edge technologies.

Against this backdrop, Google's investments in Germany are a "big win", Bitkom believes.

But such investments add to concerns about Europe's technological dependencies on the United States at a time of strained ties under the administration of US President Donald Trump.

Even when American tech giants are not the main players in a project, they often still play a vital role in areas from providing cloud infrastructure to cutting-edge semiconductors.

At a summit on so-called "digital sovereignty" in November, Merz and French President Emmanuel Macron backed the idea of favouring European firms in a bid to develop regional champions.

"Sovereignty does not mean self-sufficiency, but strategic capacity for action," says Barbara Engels of the IW Institute.

She also welcomed Google's projects but said that "we must use this infrastructure while developing our own capabilities".

Antonio Krueger, head of the German Research Centre for Artificial Intelligence (DFKI), believes it makes no sense to try to overtake China and the United States in areas such as producing the most advanced AI models.

Instead, Europe should leverage its advantages in industry, he said, adding that data collected by companies can by use to train smaller AI models to "solve very specific tasks".

In this area, "the race is still wide open," he said.

D.Bachmann--VB