The Dawn of A New Era for Germany’s Digital Economy

Deutsche Telekom Is Pushing Deeper Into GPUaaS And Sovereignty With Industrial AI Cloud

While hyperscalers and cloud providers have led the early wave of AI infrastructure, telcos are emerging as critical players in this new market. Their trusted role as national infrastructure providers, combined with data center assets, energy strategies, and sovereignty guarantees, positions them to become the backbone of national and regional AI demand.

Deutsche Telekom (DT) is transforming into a TechCo by developing and deploying advanced digital services and technologies – with a dedicated focus on the business-to-business (B2B) segment. In November 2025, DT and NVIDIA launched the Industrial AI Cloud, potentially marking a milestone in Germany’s AI transformation. The Industrial AI Cloud is expected to become commercially available in Q1 2026. This AI factory provides:

• An enterprise-grade GPU platform designed to accelerate the adoption of AI across manufacturing, logistics, and other key sectors. By combining DT’s infrastructure with NVIDIA’s AI and GPU technologies, the Industrial AI Cloud provides GPUaaS capabilities for DT’s existing cloud offerings and for new customers.
• An AI ecosystem platform for European businesses. Currently, the effort is centered largely on Germany and the DACH region. This approach supports rollout speed. In the medium term, PAC expects the inclusion of more European partners to reduce the risk of fragmented AI development across Europe.

Digital Businesses Need Access To AI

To remain globally competitive, German businesses must embrace secure, sovereign, and high-performance digital infrastructure. Their success increasingly depends on advanced AI. The Industrial AI Cloud:

• Provides trusted, high-quality AI capacity. Today, around 70% of the world’s high-performance chips are located in the United States, 15% in China, with Germany trailing in deployment. This imbalance underscores the urgency for Germany to strengthen its technological independence. The Industrial AI Cloud is designed to narrow this gap.
• Strengthens Germany’s sovereign cloud availability. The Industrial AI Cloud offers businesses sovereign AI infrastructure. Sovereign cloud and sovereign AI deployments will enable enterprises and public-sector organizations to adopt advanced cloud capabilities while maintaining full oversight of data residency, security, and governance across their most regulated operations.

PAC’s Take Regarding The Industrial AI Cloud

PAC welcomes this initiative, as it:

• Provides new competition. The Industrial AI Cloud offers a new alternative not only to local providers like Schwarz-Gruppe (and its cloud subsidiary STACKIT) and IONOS but also to the US cloud hyperscalers.
• Acts as an innovation catalyst for Germany. It is encouraging to see how major businesses like SAP, Siemens, Deutsche Bank, Agile Robots, Wandelbots, Quantum Systems, PhysicsX, and Perplexity are coming together to push the initiative towards a more digitally sovereign Germany.
• Is a first step that will stimulate a funding debate. DT plans to apply as part of the EU InvestAI initiative, which aims to create up to five gigafactories to reduce dependence on US hyperscalers and large language models.
• Raises attention to the challenge of power consumption. Energy availability remains the Achilles heel of Germany’s AI data center ambitions. As AI data center construction accelerates, overall electricity consumption is rising sharply. Sufficient availability of electrical power could turn into a challenge unless it is urgently addressed.

Find more details about this initiative and PAC’s evaluation of it in our report The Chance for a New Era for Germany’s Economy – the ‘Industrial AI Cloud’.

And as always, reach out to us at PAC (d.bieler@pacanalyst.com) to discuss the opportunities for AI infrastructure, GPUaaS, sovereign cloud solutions, and the digital transformation of the German economy.