Microsoft to pump €3.2B into German AI technologies

Microsoft will invest €3.2bn in AI tech in Germany over the next two years, the firm’s vice chair Brad Smith announced today.

The investment will see the doubling of Microsoft’s AI and data centre infrastructure capacity in Germany, said Smith. It marks the largest single investment in Microsoft’s 40-year history in the EU country. 

German Chancellor Olaf Scholz welcomed the move, noting that it signifies a vote of confidence for Europe’s largest economy. 

While the American software giant refrained from specifying the exact locations of the investments, its CEO for Germany, Marianne Janik, mentioned a focus on the western Rhineland region and the vicinity of the banking hub of Frankfurt.

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In these regions, Microsoft would be close to major customers, such as the pharmaceutical company Bayer AG and energy company RWE. This would help to keep data latency between data centres and applications as low as possible. 

AI training for over 1 million people

While Germany is one of the world’s leading technology powerhouses, it suffers from a lack of AI skills, said Smith. In response, the investment will include a programme for training up to 1.2 million people in new AI capabilities.

Microsoft’s outlay would “help build out infrastructure to help the German economy continue its use of AI and build out the skill base to fill the jobs required,” according to the company’s vice chair.

The move tops the list of the tech giant’s largest foreign investments. Last year, the firm pumped $3.14bn and $3.25bn into the UK and Australia respectively. 

While more details will surely emerge in coming weeks, the big play by Microsoft comes at a time of significant growth for Germany’s AI ecosystem. 

In November, Heidelberg-based startup Aleph Alpha raised $500mn in one of Europe’s largest AI rounds ever, while in the same month the German government pledged €1.6bn for the development of the technology. 

While the investments made by Germany — and the EU for that matter — pale in comparison with the huge sums being doled out in the US and China, the region’s strength could be in quality over quantity.

This mindset is embodied in the startups themselves. While giants like OpenAI have been heavily criticised for creating AI models based on troves of copywritten data scraped from the web, the likes of Aleph Alpha and France’s Mistral AI focus on creating accountable, fair AI models for businesses and governments.