Nvidia and Deutsche Telekom will collaborate to build a data center in Munich, Germany, it has been reported.

Unnamed sources told Bloomberg that the two companies would jointly fund the €1 billion ($1.2bn) project, which will have enterprise software company SAP as a customer.

Details about capacity, size, and the exact location of the facility in Munich were not disclosed.

Spokespeople for Deutsche Telekom and Nvidia declined to comment. DCD has also reached out to SAP and the Bavarian Government.

During its second quarter earnings, Deutsche Telekom said that it was working with Nvidia to build the world’s first industrial AI cloud for European manufacturers in Germany, launching in 2026.

It is unclear whether this announcement is referring to the same facility mentioned in the Bloomberg report. At the time, Deutsche Telekom said that the project would be located in the western state of North Rhine-Westphalia, which is a considerable distance from Munich, located in the southern state of Bavaria.

SAP and Deutsche Telekom were among the companies pitching to host a large-scale data center as part of the European Union's AI gigafactory initiative.

Nvidia also previously said in June that more than 3,000 exaflops worth of compute would be coming to Europe through Blackwell deployments.

This report emerges amidst SAP’s attempts to expand Delos Cloud, its sovereign cloud offering. The company has stated that it intends to expand its infrastructure in Germany to 4,000 GPUs for AI workloads, and in September, SAP also announced that it signed an agreement with OpenAI to use its capabilities on Delos Cloud. This is set to debut in 2026.

Munich is a prominent secondary market in Germany. A May 2024 market report by data center research firm DC Byte states that the city is the country’s third-largest market by capacity, behind Frankfurt and Berlin.