Nvidia Expands European AI Infrastructure as Qualcomm Enters Chip Market to Challenge Dominance

Nvidia and Deutsche Telekom Announce $1.2B German Data Center

Nvidia Corp. and Deutsche Telekom AG are preparing to unveil plans for a €1 billion (approximately $1.2 billion) AI data center in Munich, Germany. This collaboration is a key part of Europe’s broader strategy to bolster its artificial intelligence sector and reduce its reliance on U.S. and Chinese technology. SAP SE, Europe’s largest software company, has been named as one of the center’s first significant clients.

The announcement is expected to be made public next month in Berlin, featuring Deutsche Telekom CEO Tim Höttges, Nvidia CEO Jensen Huang, SAP CEO Christian Klein, and German Digital Minister Karsten Wildberger.

Europe’s Push for Digital Sovereignty

The new facility is designed to significantly expand Europe’s computational power, addressing concerns that the region is falling behind U.S. and Chinese tech giants. Companies like Microsoft Corp. and Google parent Alphabet Inc. have already invested hundreds of billions into massive, AI-focused data centers built to handle the energy-intensive demands of training and running generative AI models.

While the Nvidia and Deutsche Telekom data center is a major step toward European AI independence, its scale highlights the current gap. The Munich project is expected to utilize around 10,000 of Nvidia’s most advanced graphics processing units (GPUs). In comparison, a massive data center being built in Texas by SoftBank Group Corp., OpenAI, and Oracle Corp. will reportedly house 500,000 GPUs—50 times the capacity of the planned German site. This new center aims to ensure European data security and compliance with the region’s strict privacy laws by allowing data to be stored locally.

A Call for Broader EU Investment

Despite the size difference, the collaboration marks a significant milestone for Europe’s AI ambitions. Nvidia CEO Jensen Huang recently urged Europe to invest more heavily in its own computing technology, warning that a failure to do so could leave European companies overly dependent on U.S. tech firms, potentially losing control over their data and innovation.

This aligns with the European Union’s strategy, which announced a $233 billion plan in February to support AI development across the bloc. The initiative aims to triple Europe’s computing capacity within the next five to seven years and promote the creation of large-scale “AI gigafactories.”

Qualcomm Enters the AI Chip Race

As Nvidia expands its infrastructure footprint, competition in the underlying hardware market is intensifying. U.S. semiconductor manufacturer Qualcomm has announced it will launch its first artificial intelligence (AI) accelerator chips, aiming to compete directly with Nvidia, the sector’s undisputed leader, as well as rivals AMD and Intel.

Qualcomm, whose current chip lineup is heavily focused on the smartphone and mobile device market, is seeking expansion in the high-growth AI segment. This sector has revolutionized the tech industry, multiplying the results and stock valuation of companies like Nvidia.

Following the announcement, Qualcomm’s stock surged over 20% at the start of the Wall Street session and settled up around 13%, pushing its market capitalization to $205 billion. However, this valuation remains a fraction of Nvidia’s $4.64 trillion, which recently cemented its status as the world’s most valuable company.

Qualcomm’s Data Center Roadmap

The U.S. tech firm stated that it will begin marketing its AI200 chip in 2026, with the AI250 becoming available in 2027. Both chips are designed for data centers and are optimized for running pre-trained AI models (a process known as inference).

According to the company, the chips are engineered to handle large data volumes and complex calculations with low energy consumption. The group affirmed that a “robust” software stack will support both the AI200 and AI250, enabling companies and developers to deploy “secure” generative AI. With this announcement, Qualcomm joins recent efforts by Intel and Advanced Micro Devices (AMD) to capture market share in the lucrative AI chip sector currently dominated by Nvidia.