Microsoft To Invest €3.2 billion In Germany, Mirroring UK Investment

Tom Jowitt,
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Microsoft confirms it will invest 3.2 billion euros in Germany for AI and data centres, in welcome move amid a slumping economy

Microsoft has delivered some welcome news in Germany with a multi billion dollar investment – months after confirming a similar investment in the United Kingdom.

Reuters reported that Microsoft will invest 3.2 billion euros ($3.44 billion) in Germany in the next two years, mostly in artificial intelligence.

The investment comes at a welcome time for political leaders in Germany, whose economy (the largest in Europe) is said to be in recession, amid the worst slump in 20 years.

Microsoft president Brad Smith. Image Credit: Microsoft
Microsoft president Brad Smith. Image Credit: Microsoft

Germany investment

This funding will apparently be Microsoft’s biggest investment in the country for the past 40 years.

Microsoft President Brad Smith in a post on X (formerly Twitter) the 3.2 billion EUR investment will double Microsoft’s AI infrastructure and cloud capacity to meet the country’s accelerating demand for AI services and offer digital skills training for more than 1.2 million Germans by the end of 2025.

“We are doing this because of the enormous confidence we have in Germany,” Smith was quoted by Reuters as saying, adding the export-oriented economy had constantly been at the forefront of technological change.

Smith said Germany came second in Europe for the creation of AI based applications and that AI was increasingly being adopted by German companies but ranks 11th in Europe for AI skills.

German Chancellor Olaf Scholz reportedly said the move represented a vote of confidence in Germany which has also recently seen substantial investments in the battery, chip and pharmaceuticals sectors.

Economic concerns

Scholz reportedly acknowledged the export-oriented country was 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,” he was quoted as saying.

The DIHK chambers of industry and commerce warned earlier that the German economy would shrink by 0.5 percent this year, a second year of recession and the worst downturn in two decades.

It comes after chip giants TSMC and Intel committed build factories in Germany, albeit with considerable financial support from the German government.

UK investment

The investment in Germany comes months after Microsoft announced a similar investment in the United Kingdom.

The Chancellor visits Microsoft’s West London data centre .
Image credit HM Treasury

In November 2023 Microsoft made its single largest investment in its forty-year history in the UK, by spending £2.5 billion over the next three years to expand its next generation AI data centre infrastructure in the UK.

The Chancellor visits Microsoft’s West London data centre .
Image credit HM Treasury

Microsoft also said it would train more than one million people for the AI economy, as the UK government highlighted the country’s AI sector, which contributes £3.7 billion to the UK economy and employs 50,000 people.