Microsoft pledges €3.2 billion for German AI

Aims to double AI and data centre infrastructure

Microsoft has announced it will inject €3.2 billion into Germany over the next two years, with the lion's share going towards advancing AI initiatives.

The move marks Microsoft's most substantial commitment to the German market in four decades.

Brad Smith, president of Microsoft, said the company aims to double the capacity of its AI and datacentre infrastructure in the country and expand its training programmes.

Smith emphasised Microsoft's "unwavering confidence" in Germany's technological prowess, citing the nation's consistent position at the forefront of technological innovation.

"We are doing this because of the enormous confidence we have in Germany," he said.

Smith pointed out that Germany was second in Europe for the creation of AI-based applications, and that AI was increasingly being adopted by German companies - but the country ranks 11th in Europe for AI skills.

German chancellor Olaf Scholz said the move represented a vote of confidence in Germany, which has also recently seen substantial investments in the battery, chip and pharmaceuticals sectors but is feeling the effects of slower economic growth globally.

"We are waiting for the moment when it grows faster again and then everything will be in place so companies that have invested here and those that invest from Germany are ready," Scholz said.

In response to concerns about regulatory hurdles and privacy issues, Smith emphasised the importance of balanced and practical regulations. He noted: "The questions that people ask in Germany are really on the minds of people everywhere...if we can meet the standards here in Germany, we will meet the needs of the world."

Germany's tech sector growth

This investment comes amidst a series of substantial commitments to Germany's tech sector, with Taiwanese chipmaker TSMC and Intel also announcing recent investments.

Marianne Janik, CEO of Microsoft Germany, declined to specify the exact locations of the company's investments but hinted at a focus on regions such as the western Rhineland and Frankfurt's banking hub.

Microsoft's substantial investment highlights the growing significance of AI in driving economic growth and innovation, positioning Germany as a key player in the global tech landscape.