The German Federal Ministry for Digital Affairs is booking 250 million euros in cloud capacity across domestic AI data centers. A consortium led by T-Systems, a subsidiary of Deutsche Telekom, has been awarded the contract as the top-ranked bidder, the ministry announced on Thursday. A further contract was awarded to the Wiesbaden-based IT service provider SVA. 'With the AI cloud, we are creating the backbone of a sovereign, digital, and AI-capable administration in Germany,' said Federal Digital Minister Karsten Wildberger.

He did not provide details on the distribution of the contract volume between the two providers or the duration of the agreement. According to an insider, T-Systems will receive more than half of the 250 million euro investment over the next four years.

SAP is participating in the project as a technology partner. The Walldorf-based software group is contributing its data processing expertise to drive the digitalization of the public sector within the framework of the so-called 'Deutschland-Stack', said SAP CEO Christian Klein. Experts use this term to describe the various layers of IT - from data centers and AI models to applications. These are intended to remain under domestic control as far as possible. 'Anyone who wants to play a role in the world in the future must be at the forefront of the race for digital sovereignty,' emphasized Telekom CEO Tim Höttges.

The new cloud will, among other things, form the basis for the 'Kipitz' platform, the statement continued. This platform will allow federal, state, and local governments to develop and operate Artificial Intelligence (AI) applications. The focus is on the use of open standards and interfaces to reduce dependence on individual companies. Furthermore, open-source software, where the program code can be modified at any time, is to be utilized.

In response to an inquiry, Telekom stated that it would utilize existing data centers for the AI cloud. A few months ago, the Bonn-based group commissioned a facility in Munich equipped with 10,000 specialized processors from global market leader Nvidia. Telekom also relies on SAP as a software supplier at that site.

(Reporting by Hakan Ersen; Editing by Scot W. Stevenson. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)