AI Data Center | Not everything is as it seems: The real reason for Google's sudden billion-dollar love affair with Germany

The turning point for German infrastructure or an empty promise of data sovereignty?

The announcement of Google's largest investment program to date for Germany marks a turning point in the country's economic policy perception. The timing of this announcement could not have been more deliberate: mid-November 2025, at a time when German government officials were intensely debating how to reduce Europe's dependence on American technology companies. What superficially appears to be a vote of confidence in Germany as a business location reveals, upon closer inspection, a more complex and ambivalent picture of Europe's digital transformation. Google's decision to invest in Germany again after years of failed plans speaks not only of corporate calculations, but also of structural shortcomings in European infrastructure policy and the persistent technological gap between America and Europe.

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AI as a new engine: The insatiable energy hunger of data centers

The data center industry has undergone a fundamental transformation in recent years. While data centers were long considered gray utility infrastructure, they have now become the nervous system of global digital capitalism. Artificial intelligence, not cloud computing in the narrow sense, is driving this transformation. An AI query consumes many times more energy than a conventional search query. This simple technical reality explains why corporations that spent years optimizing their infrastructure globally are suddenly investing heavily in national markets again. Proximity to regulatory institutions, energy infrastructure, and customers is once again becoming crucial. Germany and Europe as a whole are on the cusp of a race for digital infrastructure, the outcome of which is far from certain.

The investment volume that Google will announce is part of a global reallocation of capital. The company is investing tens of billions of dollars annually worldwide in building and expanding data centers for artificial intelligence. Its parent company, Alphabet, alone plans to spend between 91 and 93 billion dollars on investments in 2025, with the vast majority earmarked for data centers. A significant further increase is expected for 2026. However, Germany will receive only a fraction of these resources. This illustrates the relative proportions: what Germany is presenting as a major investment is, at best, a strategic positioning in a critical region for a corporation like Alphabet.

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A shattered dream in Brandenburg: Why Google initially failed

The story of this investment begins with setbacks. Google originally announced in 2021 its intention to establish a Berlin-Brandenburg cloud region. The planned data centers were intended to become the backbone of the German and European cloud infrastructure. Initially, Neuenhagen, east of Berlin, was the target location, later changed to Mittenwalde, about 30 kilometers south of the capital. The Mittenwalde project was the most ambitious: a huge data center was to be built on a 30-hectare site, creating approximately one hundred qualified full-time jobs. Google acquired the land and signed preliminary agreements. Everything seemed to be coming together.

Then, in June 2025, came the abrupt end. Google halted the Mittenwalde project without providing a detailed explanation. The official justification was vague: after a thorough examination of feasibility, market developments, and company-specific priorities, the decision was made against construction. Behind this wording, however, lay concrete infrastructural problems that reflect the entire dilemma of German energy policy. The central problem was the power supply. The existing power grids would not have been sufficient and would have required massive expansion. The energy consumption of a large AI data center is enormous, and the German power infrastructure, despite the expansion of renewable energies, was simply not designed to handle such loads. While Google was prepared to invest in buildings and cooling, the company was unwilling to also finance the basic grid infrastructure in Brandenburg.

At the limit: Europe's power grids and the global AI explosion

This failure reveals a fundamental problem. The energy demand of data centers has exploded. In 2024, data centers in Germany consumed approximately 20 billion kilowatt-hours of electricity, equivalent to the annual consumption of about 5.7 million two-person households. This already represents about three percent of Germany's total electricity consumption. But this is just a taste of what's to come. Global electricity consumption by AI data centers is projected to increase elevenfold from the base year of 2023 to 2030, from 50 billion kilowatt-hours to around 550 billion kilowatt-hours. In Europe, the overall demand for data centers is expected to rise from 100 terawatt-hours in 2022 to 150 terawatt-hours by 2026. According to the International Energy Agency, data centers will require more energy by 2030 than twice the total energy consumption of Germany in 2024. These figures are almost incomprehensible, and they lead to a spiral: more data centers need more electricity, more electricity needs more infrastructure, and in an age of energy transition, renewable energies will be increasingly tied up, possibly even cannibalized, by AI data centers.

This problem is not limited to Germany. Ireland, long a magnet for data centers due to cheap energy and stable markets, had to impose a moratorium on new data center construction in 2023 because the national power grid could not handle the increased load. Parts of London experienced something similar. Spain had an almost 18-hour power outage in 2023, which was at least partly due to unexpectedly low solar power generation. Across Europe, a pattern is emerging: data centers, as energy-intensive infrastructure, are reaching the limits of national power grids, which are inherently fragmented and shaped by 20th-century stability logics.

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The paradox of sovereignty: Europe's divided tech policy

German energy policy is struggling to keep pace. While the expansion of renewable energies has progressed, it hasn't moved at the speed required by AI data centers. Under Chancellor Friedrich Merz, the government promised to turn the country's economic fortunes around, but unemployment is rising and key industries are under pressure. A large data center from Google would have served as a vote of confidence. Instead, two projects failed. This is why the new investment announcements are being met with such enthusiasm: they are so desperately needed that any promise is welcome, regardless of whether it actually addresses the underlying structural problems.

This must also be understood in an international context. The German government is actively pursuing the goal of attracting international investors. Chancellor Merz has appointed former Commerzbank CEO Martin Blessing as investment commissioner. At the same time, the government is pursuing the contradictory goal of freeing Germany from its dependence on American technology providers. The Trump administration and its protectionist trade policies have convinced even transatlanticists like Merz that European sovereignty is necessary. Germany and France are planning a summit on Europe's digital independence. Union politicians are calling for a gradual shift away from American cloud providers. And yet: Google will invest its capital and infrastructure, and Germany will welcome these investments with open arms. This is the paradox of European technology policy. It wants to be independent but lacks the resources to build the necessary infrastructure and is therefore forced to negotiate with oligopolies.

From Brandenburg to Hesse: Google's new strategy and the promise of waste heat

Google already operates or has under construction several data centers in Germany. Hesse is the most important federal state in this regard. In Hanau, Google operates a data center that opened in 2023. In the towns of Erlensee, Dietzenbach, and Babenhausen in the Rhine-Main region, Google has secured land where future data centers could be built. The Rhine-Main region is ideally located for data centers, not only because of its proximity to Frankfurt with its DE-CIX internet exchange point, one of the world's largest hubs for digital data flows, but also because its energy infrastructure is superior to that of Brandenburg. Under these circumstances, focusing on Hesse makes strategic sense. However, this also highlights a structural problem: While some regions of Germany can become hotspots for digital infrastructure, others remain completely neglected. Brandenburg, where Berlin is located, remains underserved because its power grids are inadequate.

Google's new investment package will be presented in detail on November 11, 2025, in Berlin, together with Federal Finance Minister Lars Klingbeil. Plans include the construction of infrastructure and data centers, innovative projects for the use of renewable energies and waste heat recovery, as well as the expansion of its locations in Munich, Frankfurt, and Berlin. The keyword "waste heat recovery" is strategically significant, as it indicates that Google has begun to take the energy aspect more seriously. Waste heat from data centers is indeed a huge, yet largely untapped resource. A data center with an IT connection capacity of more than five megawatts produces enough waste heat to feed district heating networks. According to calculations by the German Federal Environment Agency, the waste heat from the larger German data centers could supply the heating needs of approximately 32 million square meters. This corresponds to enormous savings if this potential could be realized. But here, too, the hurdles become apparent: Most data centers use air cooling instead of water cooling, and retrofitting is expensive. Long-standing questions of security and reliability also resurface. Utilizing the waste heat from data centers also means close coordination with local heat supply infrastructures. This is possible, but not trivial.

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Dependence as a new business model: The German economy in the cloud

The context of these investments is geopolitically charged. Last year, Microsoft announced plans to invest €3.2 billion in German data centers. Deutsche Telekom and the US chipmaker Nvidia have invested €1 billion in an AI data center in Munich, scheduled to begin operations in 2026. Amazon Web Services is also present. These multi-billion-euro investments by American tech giants in European data centers are part of a global infrastructure offensive, but they also raise questions about European sovereignty. What does it mean when the cloud infrastructure on which European companies store their data and run their systems is controlled by American companies?

The German business model since the post-war period has been heavily influenced by the idea of ​​medium-sized, owner-managed companies that could maintain their production secrets and operational processes within their own factories. With the advent of cloud computing and AI, this logic is losing its power. A growing number of businesses, particularly in the SME sector, are using data centers for their critical data and processes. Studies show that 51 percent of German companies use data centers, an increase of approximately 25 percent compared to two years prior. The number of jobs whose existence depends on data center services has grown explosively. The German Economic Institute (IW) has calculated that by 2024, around 5.9 million workers will be employed in companies whose business model would be impossible without the cloud. Two years ago, this figure was 2.8 million. That's an increase of approximately 126,000 jobs per month. Dependence on the global data center ecosystem is no longer peripheral, but central.

Under these circumstances, the question of European sovereignty is also a question of data sovereignty. Forty-five percent of the companies surveyed stated that it is important to them that data centers are located in Germany. Data protection concerns are a major reason: almost half of the companies cite data protection as the reason they avoid the cloud. This is not irrational. If European companies outsource their data to American corporations, this data is ultimately subject to American security laws in the US. An open question is whether American intelligence agencies can access this data. This is not paranoia, but a legitimate business consideration. It is regulatory and geopolitical considerations that make European companies cautious.

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Europe's resistance and the American value chain

The European response is a top-down strategy of digital sovereignty. The European Union is accelerating its rise to global AI power with a clear strategy presented in October 2025. This initiative includes investments of €200 billion over the coming years, focusing on infrastructure, data access, and AI adoption. Germany has increased its AI strategy to €22 billion by 2030. With projects like the virtual institute RAISE (Resource for AI Science in Europe), the European Union aims to act as a kind of CERN for AI and promote Europe's independence. All these initiatives are designed to ensure that Europe does not remain merely a consumer of American technology, but rather builds its own independent AI industry.

The reality, however, is more complex. A large portion of the billions invested in German data centers is not flowing into the German location itself, but rather into the purchase of high-performance technology from the USA. The biggest beneficiary of this data center offensive is Nvidia, whose graphics processors have become standard in almost all AI data centers. Experts estimate that for large data center facilities, roughly 60 to 70 percent of the total investment is spent on semiconductors alone. In the recently announced Telekom data center in Munich, this amounts to well over 600 million euros flowing directly to Silicon Valley. Only about 10 to 20 percent of the investments generate local added value in Germany. The rest is ultimately American capital and American technology passing through Germany.

This isn't inherently wrong, but it highlights a fundamental problem in European technology policy. There is a profound asymmetric trade relationship between America and Europe. America exports chips, software, and platforms to Europe, and Europe exports data back to America. This asymmetry leads to a structural dependency that goes beyond purely technical issues. It's about control, value creation, and political authority. As long as Europe is unable to build its own chip industries, it will remain trapped in this position.

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Structural hurdles: From local opposition to global power concentration

These structures become even clearer when looking at the value chains. The German Economic Institute (IW) has calculated that data centers generate an additional gross value added of approximately €250 billion for the German economy when indirect spillover effects on other sectors are factored in. These are enormous figures. But this value creation doesn't originate in the data centers themselves. It arises in the companies that use data centers to increase their productivity, conduct data analyses, and train their AI systems. The data centers are the backbone, but the value creation happens at the edges. While 65,000 jobs exist in the data center industry itself, that's a significant number, but it's small compared to the 5.9 million jobs that depend on data center services. The multipliers are enormous, but so is the vulnerability.

A second critical aspect is the energy question, not only as a technical but also as a geopolitical problem. European power grids were built according to 20th-century logic. They were not designed to handle gigantic, concentrated loads like a large AI data center being activated simultaneously in many locations. A large data center can require five gigawatts or more, which in some European regions represents the entire local capacity. The solution is obvious: decentralized infrastructures with strong local power sources, massive investments in storage technologies, and flexibility in supply and demand. But all of this takes time and money, which America has.

The US is consolidating its position. A consortium led by Nvidia and BlackRock recently acquired the American data center operator Aligned Data Centers for $40 billion. The consortium, called the Artificial Intelligence Infrastructure Partnership, plans to control a vast infrastructure of over 50 data center locations with a total power consumption exceeding five gigawatts. This represents an unregulated concentration of power over digital infrastructure. Nvidia has also secured major contracts: According to the Financial Times, Oracle plans to invest around $40 billion in the purchase of 400,000 Nvidia GB200 chips to equip a gigantic 1.2-gigawatt data center in Abilene, Texas, part of a $500 billion project with OpenAI. These figures are enormous and demonstrate the material foundation upon which American tech power is built. Europe does not have these resources. At the same time, Europe has a broader base: the industrial expertise of Germany, France, and Italy, the decades of accumulated technical knowledge, is real. But without its own infrastructure and without control over the digital base, this expertise cannot translate into digital power.

Another problem lies in the strategic uncertainty and fluctuating political priorities in Germany. The Mittenwalde project failed not only for technical reasons, but also because the local permitting processes were lengthy and the regulatory framework remained uncertain. Data centers are unpopular in many German communities. They are perceived as a negative, energy-intensive, and have few positive effects on the local population. The permitting processes can drag on for years. This is a form of local opposition that is quite understandable, but it also explains why tech companies are hesitant to invest in Germany. The US has clear regulations, fast permitting processes, and a pro-tech culture that is dominant, at least in Texas, Virginia, and other centers. Germany and Europe need to accelerate their processes and establish a new mindset in which data centers are treated as strategic infrastructure, like airports or nuclear power plants.

A symptomatic investment: More than just a sign of confidence.

The other major tech investments in Germany are significantly more recent. The Telekom data center with Nvidia will go online in 2026. Microsoft and Amazon are also present, but their concrete infrastructure is still in the future or not yet widely visible. Under these circumstances, Google's announced major investments are significant not because of their absolute size, but because of their symbolic power. They signal that Germany and Europe are becoming attractive again after years of stagnation. They also signal that the regulatory and political framework could improve. The only question is whether this will be enough to bring about real structural shifts.

The real problem is that digital infrastructure has become a public good, but it's provided by private actors. A data center isn't an engineering marvel like an airport or a highway; it's a black box that absorbs value and distributes it externally. The US has long understood the strategic importance of controlling digital infrastructure. Germany and Europe need to understand this too. This doesn't mean the government itself has to build data centers. But it does mean the government has to create the framework so that European companies and governments have a genuine choice. As long as only American tech companies have the resources and power to build large data centers, the dependency will remain structural. As long as Nvidia is the only chip manufacturer supplying graphics processors for AI on a large scale, the dependency will persist.

Google's new investments in Germany are therefore neither simply good news nor a solution to structural problems. They are a symptom of European weakness: the ability to build infrastructure has been delegated to global oligopolies. What Germany urgently needs is not just investment from Google, but its own capabilities, its own infrastructure, and its own strategic independence. This is a project spanning generations, and it has only just begun. Without radical political and corporate transformation, Europe will continue to fall behind America in the coming decades, no matter how many billions Google invests.

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