Schwarz Group, the German owner of Lidl and Kaufland, is building a reported €11 billion AI data center near Lübbenau in Brandenburg, creating capacity for as many as 100,000 graphics processing units without direct government subsidies. The project could give Europe a large, locally controlled computing platform as governments and companies seek alternatives to dominant US cloud providers.

The development is planned for the site of a former coal-fired power plant and is expected to reach 200 megawatts of computing capacity, according to reporting cited by Thorsten Meyer AI from Data Center Dynamics, ESM and other industry publications. The reported budget comprises about €2.5 billion for construction and €8.5 billion for technology. Its first module is expected by the end of 2027.

The project is being led through Schwarz Digits, the group’s technology division and operator of the STACKIT cloud platform. Schwarz Digits generates about €1.9 billion in annual sales, making the Lübbenau commitment more than five times the division’s yearly revenue. Its parent, however, has far greater resources: Schwarz Group records roughly €175 billion in annual revenue, employs about 575,000 people and operates across 32 countries.

The source material says the project is receiving no government subsidy. That distinguishes it from Intel’s planned semiconductor factory in Magdeburg, which had been linked to €9.9 billion in German state support before the project was cancelled in July 2025. The comparison does not prove that private financing will always outperform public industrial policy, but it shows how a large corporate balance sheet can move without waiting for a state-aid package.

Private Capital Builds AI Capacity

Europe’s AI companies need access to large clusters of advanced processors, but much of that infrastructure is controlled by Amazon, Microsoft and Google. A German-operated facility of the planned scale could give businesses and public-sector customers another option for storing data and running models under European jurisdiction.

Schwarz also brings assets that a new cloud company would struggle to assemble quickly. STACKIT has had about a seven-year infrastructure head start, with a reported 20,000 servers and 22.5 petabytes of storage. The wider retail group processes more than 13 billion transactions a year and already works under security and resilience requirements associated with large-scale retail infrastructure.

The financing model matters as much as the hardware. Schwarz Group is controlled by Dieter Schwarz and a foundation structure, rather than public shareholders focused on quarterly returns. That ownership may support a long investment horizon, although the source’s wider claim that industrial capital generally beats government investment remains an interpretation, not an established result.

Retailer Became Cloud Operator

Schwarz created Schwarz Digits in September 2023 to bring its technology operations into a dedicated division. It includes STACKIT and cybersecurity assets such as XM Cyber, and reportedly began with about 7,500 employees. STACKIT was initially built to serve the group’s own operations before being marketed to outside customers.

The division’s appeal rests partly on its European ownership and compliance record, which includes reported alignment with BSI C5, ISO 27001, SOC 2 and DORA requirements. Those credentials were developed through the group’s existing digital operations rather than specifically for generative AI.

The project arrives as European policymakers promote domestic cloud and AI infrastructure. Other companies have pursued different models: Dutch chip-equipment maker ASML invested €1.3 billion in Mistral AI, according to reporting cited in the source material. Schwarz is taking a more infrastructure-heavy approach by funding the physical site, power capacity and computing systems.

“Europe’s sovereignty didn’t get nationalised — it got privatised.”

— Thorsten Meyer AI dispatch

Hardware and Demand Stay Unclear

It is not yet clear which GPUs Schwarz will purchase, how quickly the planned 100,000-unit capacity will be installed or how much of the €8.5 billion technology budget has been contractually committed. The project’s energy sourcing, construction milestones and final operating capacity also require further public documentation.

The commercial case depends on STACKIT attracting customers beyond Schwarz Group. The source material does not provide signed customer commitments, expected utilization rates or a timetable for recovering the investment. If outside demand falls short, the project could become an unusually expensive internal computing platform.

Claims of sovereignty also have limits. A European data center may still depend on US-designed processors, software and productivity tools. STACKIT’s reported five-year exclusivity arrangements could replace one concentrated supplier relationship with another, while Schwarz’s private ownership provides less public financial disclosure than a listed company.

Lübbenau Faces Its First Test

The next measurable milestone is the planned completion of the first Lübbenau module by late 2027. Before then, equipment orders, power agreements, construction progress and customer announcements will show whether the site is developing on its reported schedule.

Attention will also focus on whether STACKIT wins external workloads from German companies, public agencies and regulated industries. Those contracts, rather than the headline capacity figure, will determine whether Schwarz has built a viable European cloud competitor or primarily expanded its own internal infrastructure.

Key Questions

Who owns the Lübbenau AI data center project?

The project is backed by Schwarz Group, the privately controlled German company behind Lidl and Kaufland, through its Schwarz Digits technology division.

How large is the planned investment?

The total commitment is reported at €11 billion: about €2.5 billion for construction and €8.5 billion for technology.

Is the project receiving government subsidies?

The supplied source material says the project is proceeding with no direct government subsidy. Public records on permits, infrastructure support or other indirect assistance would be needed to define the full government role.

Will the center contain 100,000 GPUs immediately?

No. The reported figure is capacity for up to 100,000 GPUs. The installation schedule, processor models and initial number of deployed chips have not been publicly detailed in the supplied material.

Does this make Europe independent from US technology?

No. The center could expand European-controlled cloud capacity, but it may still rely on foreign-designed chips and software. It represents a possible change in infrastructure ownership, not full technological independence.

Source: Thorsten Meyer AI