Major AI expansion – Microsoft billions for German data centers

“This is a good morning for Germany,” the Chancellor said. Measured by the size of the country, the Federal Republic is without a doubt the most successful export economy in the world. Germany is not only a country that trades with the whole world and invests everywhere, but also makes investments possible in its own country.

In order for Microsoft to release the enormous investment amount, neither the federal government nor the two main benefiting states of North Rhine-Westphalia and Hesse had to make financial advances. “We will not receive any subsidies and have not requested any,” Microsoft President Brad Smith said in Berlin.

Proximity to major German customers
Microsoft does not indicate exactly in which regions of the Federal Republic the money will be invested over the next 22 months. According to Microsoft Germany boss Marianne Janik, most of the money will flow to the Rhenish district. Microsoft will also set up a new cloud region in North Rhine-Westphalia (NRW). The group seeks physical proximity to major German customers such as Bayer and RWE to keep data transit times (latency) between the data centers and applications as low as possible. Various high-speed lines also run through the region, providing good connections with neighboring European countries, such as Belgium and the Netherlands.

Prime Minister Hendrik Wüst (CDU) of North Rhine-Westphalia viewed Microsoft’s investment as a “strong signal for Germany and a major contribution to structural changes in the Rhenish region.” With this billion-dollar decision, Microsoft is making an important contribution to sustainably stimulating the transformation of the economy in North Rhine-Westphalia. “The fact that a global player is making such an investment in North Rhine-Westphalia is a sign of confidence and the result of a concrete location policy.”

Hesse will also benefit from Microsoft’s investments. The Rhine-Main region is Germany’s most important location for data centers thanks to the large DE-CIX internet exchange in Frankfurt. The existing Microsoft cloud region Rhine/Main will be further expanded. Hesse Prime Minister Boris Rhein (CDU) said that his state is a strong and dynamic location with good conditions for the information and communications industry and one of the leading locations in Europe. With the investment, Microsoft also strengthens the Rhine-Main region as an innovation engine for industry and the financial sector.

Few jobs directly in data centers
However, only a limited number of new jobs will be created to operate the new data centers. However, Microsoft President Smith made a different calculation in Berlin to describe the effects of the billion-dollar investment. On the one hand, you need a lot of people to build these data centers and develop the infrastructure. The number of jobs needed to operate the data centers is actually small. But the actual job growth is happening elsewhere: “If AI does what it is supposed to do, it will also help all other sectors of the economy become more innovative and globally competitive. It will also contribute to employment growth.”

Germany is well positioned in this regard. The use of artificial intelligence in businesses is an early indicator of positive economic development. Here, Germany ranks second in Europe per capita, behind Great Britain. “You obviously expect Germany to produce high figures, because it is the largest economy in Europe.”

ChatGPT is now common knowledge
According to a survey published on Thursday by the D21 initiative, the majority of people in Germany participate in the digital world and can use its possibilities in a self-determined way. At the same time, however, the ability to keep up with digital changes in the future is decreasing. When it comes to artificial intelligence applications, people in Germany most likely have experience with the text robot ChatGPT from Microsoft partner OpenAI. Nearly one in five respondents said they had already used ChatGPT in the first six months after launch.

Against this background, Microsoft’s investment program also includes a training and upskilling offensive. Up to 1.2 million people must be familiarized with the possibilities of AI. Microsoft Germany boss Janik announced that we would collaborate in a proven network with various institutions and organizations such as the Federal Labor Office, the employers’ organization and various non-governmental organizations.