Deutsche Telekom and retail conglomerate Schwarz Group are in advanced talks over joining forces on a bid to build European Union-funded AI data centre infrastructure in Germany, newspaper Handelsblatt reported.

The newspaper asserted multiple sources flagged the discussions on the so-called AI Gigafactory, with investment company Brookfield potentially coming in as a financial backer alongside the European Union funding.

Schwarz, which owns retailer Lidl among other businesses, and Deutsche Telekom have been linked with moves to build the EU-backed infrastructure a number of times during 2025, alongside various other companies.

The operator’s CEO Timotheus Hoettges has also been a vocal backer of the need for Europe to control its own digital infrastructure and last month unveiled plans for a €1 billion data centre project in Munich in partnership with Nvidia.

In its statement announcing the deal with Nvidia, Deutsche Telekom noted the Munich project was independent of “the EU project for the promotion of the construction of several AI Gigafactories throughout Europe”.

Cash for the AI Gigafactories form part of a €200 billion investment plan unveiled by the European Commission in February 2025 to support technology development and independence across the region.